Which asset class is most likely to perform well under the new Capital Gains Tax (CGT)?

By now you’ve probably heard that the Australian dollar has lost some of its value and the government is considering whether or not to impose an additional levy on foreign investors to offset the pain from the GST on foreign investment. 

This has led some commentators to speculate that foreign investors could be able to save money by buying Australian government bonds. 

But there is another way of looking at this: if foreign investors were buying Australian bonds, how would that change the asset class they are buying from?

The asset class in question is the corporate debt market.

For a while, the dollar held sway in this market. 

It was used as a benchmark for benchmark corporate bonds.

This allowed investors to compare the yield on the yield they could earn on a particular bond to the yield a bond was earning on the market.

For example, if you could buy a bond that earned 3.6% on the Australian market, and then compare that to the 3.3% you could earn if you bought the same bond in New Zealand at the same price, you would be able make a more informed decision about whether or no the bond should be sold.

In other words, foreign investors might be able buy Australian government debt with a little more certainty than Australian bond investors.

The key point here is that foreign investment in Australian government securities is not taxed at all.

The only way to tax foreign investment is to levy a GST. 

The government has decided that the tax is not likely to be imposed in this situation, and has said it will not impose an extra levy on the overseas investor to offset this pain.

However, the Treasury has not yet decided what it will do next.

The tax has been the focus of speculation for some time, and there is a lot of debate about the impact of this on the economy. 

What is the impact? 

The impact of an extra GST on the foreign investor will depend on their income. 

If they earn more than $200,000 a year, the impact will be higher than if they earn less. 

There is some evidence that foreign income will be negatively affected, so it is a good idea to be wary of any investment you make with this foreign investor. 

For example the Treasury says that if a foreign investor is earning $50,000, they should not invest in Australian bonds.

In fact, if a foreigner invests $50K a year and earns $100,000 they will have to pay a tax on $40K of their foreign income to the Treasury. 

How much is the levy? 

A $40,000 foreign investor would have to spend about $15,000 in total on buying Australian Government bonds.

The Treasury estimates that this would mean an extra $100K in tax on the investment.

So if a $100k foreign investor invests $20K in Australian Government securities and earns about $25,000 over the course of their life, they would have a net tax bill of about $200K.

That is a substantial amount, but it does not take into account the cost of any capital gains tax they might have. 

Why is this important? 

If you want to invest in corporate bonds, it is important to be aware of the possible impact on your income and the impact on the government debt market if the foreign investment tax is imposed.

If the foreign investors’ investment is taxed, they are taxed on the difference between their income and their tax liability. 

Is there any evidence that this tax would be imposed? 

There has been some debate about this. 

Some economists have suggested that there is some doubt about whether the foreign interest tax will be imposed, and others have suggested it is not going to be. 

However, it appears that there are arguments to support the idea that the foreign tax will not be imposed. 

According to the Bureau of Statistics (BIS), foreign investors are not taxed on their foreign investment income.

According to this, if foreign investment investors are taxed at their Australian tax rate, the foreign entity will pay an additional tax on their Australian profits.

The BIS argues that this is a “marginal tax”, meaning that the amount of foreign income that is taxed at a particular tax rate is not significant enough to be significant.

However, there is evidence that the BIS is under-estimating the amount that will be taxed on foreign capital gains.

So, the BISS says that the total amount of tax that will apply to foreign investment gains will not exceed the BISC’s estimate of the marginal tax rate.

What can be done to mitigate the impact to foreign investors? 

While the government has not said how it will handle the tax on foreign investments, it has said that it will ensure that foreign investments do not affect the income of foreign investors. 

Foreign investors who do invest in a foreign company will be able, if they wish, to defer payment of the foreign taxes for up to 5 years.This means