Money, Australian-style

1 Tax

Tax calculation in Australia is simple and automated. Except, not completely automated, especially for capital assets. For example, I invested a lot in equities this year. Fooled by the fact that some of my shares automatically entered themselves into my tax return, I thought they all would. No. And some of the ones that did tidy up after themselves did so in a way that was not helpful. Instead of identifying which equity by name, a mysterious 8-digit number appears in the tax record, which doesn’t seem to correspond to anything in my equity ownership records. So, I end up doing forensic accounting myself. This needs to be tidier.

Options for tax return preparation include:

• Neat Google Sheet from someone on Reddit

• Sharesight promises automating this tedious task as a feature.

  UPDATE: so far it has saved me many hours of life. I am impressed, even at the astonishingly poor exchange rate where the subscription is AUD25/month, i.e. about 200% of the US price. It integrates well with Interactive Brokers Here is a referral link. Tell ’em I sent you and get 10% off plus send me a USD10 kickback.

• Presumably other things? I have not yet tried them.

2 Real estate

Australia is deeply invested in policies to perpetually pump real estate speculation, which is a depressing drag on the profound potential of this country, in my opinion, and a tax upon wonder. We could build anything here, make anything, but instead we sell houses to each other, and vie for a slice of the passive income that we shave off the active economy, playing the intergenerational zero-sum game.

So long as I live here, a speculative real-estate economy will shape everything around me, so I must engage with it and, I suppose, find my own bit of peace at the expense of the wider economy. Currently, I am trying to minimise my exposure to the entire bubble via cohousing, which is a relatively good harm reduction strategy for my temperament. The whole thing is still sad, though.

3 Equities

Trading in equities in Australia.

I am not super bullish on the Australian economy in general so I would like to have a lot of my investments in international equities. The firm that seemed to offer me the best balance of diversity and price was Interactive Brokers a.k.a. IBKR (referral link). I recommend them based on my experience, but I am not a financial advisor, this is not financial advice, do your own research.

Their vibe is “rough edges but gets the job done affordably” which is more or less what I want in an investment platform. There are too many complicated things going on to get everything smooth. They support sophisticated automated algorithmic trading, have lots of APIs, exposure to lots of markets, automated forex and lots of other smooth stuff. None of it is obvious, but the user manual is good, so I can figure it out.

Previously I used HSBC Trading which was fine but without much diversity of international equities, and occasional weird things like breaking my order into two parts and charging me $25 for each, but one of the parts was an order for one single share. That is the kind of rude behaviour a decent algorithm would have avoided, or a decently liquid market. IBKR is much better in this regard, probably on both counts.

4 Cryptocurrency

We can own cryptocurrency in Australia. It counts as a capital asset, so we pay capital gains tax on it.

It is inconvenient to purchase cryptocurrency in Australia due to some weird regulation I have not had time to understand; I suspect there is extra compliance overhead for the exchanges.

Check your favourite search engine for a list of ones supporting actual Australian currency transfer.

Other more-widely-recognised exchanges such as Binance do not work well here. The easiest way with those seems to be to purchase by international money transfer to buy an exchange balance in a foreign currency then use that. AFAICT this ends up being cheaper and faster than peer-to-peer transactions, which are also available.

Observationally, institutions which handle cryptocurrencies in Australia seem to handle only cryptocurrencies, and not other asset classes. For example, Revolut in Australia will let me “buy” cryptocurrencies, but not transfer them to other exchanges or swap them for anything but AUD, so it is purely a speculative instrument not a medium of exchange.

Further, institutions which handle both AUD and cryptocurrencies in Australia do not seem to handle fancy derivatives or other derivatives. There does not seem to be anything practically stopping us from using a foreign exchange for this, but check with your accountant about that. I suspect it incurs a tax event and associated paperwork.

• CoinSpot
• Swyftx
• OKX

5 Superannuation

See retirement in australia.

Saasu and Xero work out of the box for the Australian tax and compliance environment.

Hiveage can support Australian taxes with its custom tax configuration, but it’s ugly.