Australian expats who are residents out of Australia can access Insurance Bonds which are offered by an insurance company based in a low/zero tax location such as the Isle of Mann, Jersey or Guernsey. These insurance companies pay no tax on your investment earnings compared to their Australian counterparts who have to pay 30% tax. Even if you return to Australia your offshore Insurance Bond will retain its tax exempt status for the life of the policy.
Now provided you meet the same conditions as an Australian Insurance Bond there will be no tax payable on redemption provided (a) you do not withdraw inside the 10 year period and (b) you do not contribute more than 125% of the preceding years contribution.
So not only do you avoid paying any tax on investment earnings you also get to redeem the Insurance Bond after 10 years without any tax. This is a significant tax advantage any Australian expat has over an Australian resident.
As an alternative to superannuation an offshore Insurance Bond could be a superior vehicle to save for your retirement.
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