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Old 10.08.2009, 17:26
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Moving to Australia, should I cash out my pension?

Hello,

I will be moving back to Australia and so thinking about cashing out my pension fund. I don't own property and so as soon as I arrive back home I will be looking to buy my first house and use the pension fund money. This sounds like a good plan to me but friends of mine are saying that it is better to leave it in the pension fund here and just buy what I can afford when I arrive home as when I get older I will needed it more than a swanky house. I did think about it but the 1.5% interest I'd get here is a lot less then the 7% interest i would be paying in Australia had I not used the pension fund money - so in a way I will be making 7% tax free. Yes I know that I will have to pay tax when cashing it out, but over time I think I would be better off.

Any thoughs?
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Old 10.08.2009, 19:09
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Re: Moving to Australia, should I cash out my pension?

Cash out from your Swiss pension-plan.
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Old 10.08.2009, 19:16
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Re: Moving to Australia, should I cash out my pension?

It depends on if you are leaving for good... right?
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Old 10.08.2009, 19:29
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Re: Moving to Australia, should I cash out my pension?

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Hello,

I will be moving back to Australia and so thinking about cashing out my pension fund. I don't own property and so as soon as I arrive back home I will be looking to buy my first house and use the pension fund money. This sounds like a good plan to me but friends of mine are saying that it is better to leave it in the pension fund here and just buy what I can afford when I arrive home as when I get older I will needed it more than a swanky house. I did think about it but the 1.5% interest I'd get here is a lot less then the 7% interest i would be paying in Australia had I not used the pension fund money - so in a way I will be making 7% tax free. Yes I know that I will have to pay tax when cashing it out, but over time I think I would be better off.

Any thoughs?
Let's see, cash out your hard earned money and put it into a real estate investment that will not only hold its value, but also provide you with decades of shelter and enjoyment....versus leaving it in the hands of unseen Swiss bankers and pension fund managers who have only their own best interest in mind...hmmmmm.....I dunno. That's a tough one.
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Old 11.08.2009, 09:52
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Re: Moving to Australia, should I cash out my pension?

Watch out for tax!

Find out how the ATO will consider the money. They may count it as income for the year, which means you could lose 40% plus of it. (I have no special knowledge in this area, just a suggestion to consult someone who does.)

You should also be aware that Australia has, by many calculations, the world's most expensive houses, when compared to incomes, and the highest levels of personal debt, when compared to GDP. And, it's probably the only country in the world with a debt-fuelled housing bubble that hasn't popped yet.

But Australians are obsessed with houses, so I guess I won't talk you out of that. But you should find out what the govt will want to do with your money.
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Old 11.08.2009, 10:02
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Re: Moving to Australia, should I cash out my pension?

I second the comment about tax. It was incredibly much the taxation when I asked for cashing out from Denmark and it didn't really worth doing it at the end...But hey, it was Denmark, the synonym for taxation
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Old 11.08.2009, 10:24
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Re: Moving to Australia, should I cash out my pension?

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I second the comment about tax. It was incredibly much the taxation when I asked for cashing out from Denmark and it didn't really worth doing it at the end...But hey, it was Denmark, the synonym for taxation
Yes, I was only thinking about how Australia would tax the money - I didn't even think about the Swiss!
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Old 08.11.2015, 12:58
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Re: Moving to Australia, should I cash out my pension?

This is Quite an old thread but I'm actually facing the same questions. How did it work out in the end?
Did your pension fund taxed in australia as income?
I'm planning to build up some 3a savings making chunks of 15000 for each account. This will be taxed in CH when cashing but at a lower rate. The condition is that I will be living in AUS. But this strategy is only worth it if Australia doesn't tax this money again as income..
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Old 08.11.2015, 13:22
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Re: Moving to Australia, should I cash out my pension?

I think I just found an answer to my question myself

This Document from the canton lucerne explains which countries have a Doppelsteuerabkommen. But it seems like I will have to pay taxes in both countries as the doppelsteuerabkommen is not valid for 3a but only for 2a. And even in 2a I pay taxes whereever I am resident.
This means if I I have to be living in switzerland and take out the money as Australia taxes higher. Therefore there is no advantage for people leaving switzerland and paying 3a unless you have a Doppelsteuerabkommen and leave to some rare country with lower taxes than switzerland.
Australia is not one of it.
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