I've been browsing these forums for months, and have been so grateful for all of the advice and lessons shared. I'm hoping someone more knowledgable than I can show me the way forward for my situation, which is a little nuanced.
I'm a 31-year-old that relocated from Australia to the UAE ~5 years ago. Upon my departure – and on advice from my accountant – I wanted to get certainty around my tax residency status. After filing a case with the ATO and laying out my circumstances, I was ruled a non-tax resident of Australia.
Because of my financial ignorance, I've spent these past few years without a dollar invested in the market. I'm hoping to change that imminently. Naturally, living and working in a tax-free environment, as a non-tax resident of Australia, is a substantial investment opportunity, as I could invest back in Australia without CGT, through a platform like NABTrade.
However, just as I was about to begin an investment journey, I've received a job offer in the UK, and will be relocating there imminently (I am in the tech sector). I've since confirmed with a UK-based accountant that, while in the UK, I will be considered a non-domiciled UK resident, and therefore only taxed on UK-sourced income. That means that dividends, capital gains – whatever I do around the world – will be irrelevant to my British taxes, so long as the money doesn't touch my UK bank account.
I have successfully opened a NABTrade account (I'm well-aware of the platform's flaws and poor customer service, but for my set-and-forget purposes, and for the opportunity to have CHESS-sponsored trading, I'm OK with it). I anticipate that it's more likely than not that I will one-day return to Australia.
As terrifying as it is, I'm looking to lump-sum invest my $200,000 AUD in savings (rather than DCA) and get my investment journey started in earnest.
These are my questions, and I'd so appreciate any guidance.
- 1. Ideally, I would have liked to invest in a Vanguard Lifestrategy Fund. I know they're imperfect, but I am a first-time investor who is also rather emotional with cash. I'd be happy with an 80% perfect solution, rather than being frozen by fear. Unfortunately, I'm unable to open a Vanguard Australia account as a non-resident. As such, considering my access to NABTrade, I'm considering allocating 100% of my funds to VDHG: a publicly listed ETF that contains 40% Australian equities, 18% Global equities AUD-hedged and 42% Global equities. Is this an apt comparison to a Lifestrategy Fund? My biggest reservation with VDHG is how much Aussie equities are in there. I don't see a whole heap of aggressive innovation or growth in the country, but I may not be seeing things clearly.
2. If I invested in VDHG – or a similar Australian-traded ETF – would there be any meaningful ramifications as a non-tax resident of Australia? I'm still confused about whether I'll be heavily penalised by dividends and so on. And what about the US/int'l shares that are packaged within the ETF – does that have any consequences?
3. Does the above plan make sense for an expat first-time investor looking to overcome analysis paralysis, and just get on with life? I don't need this to be perfect, just 80% of the way there, know what I mean? I'm fortunate enough to be able to pile on ~$10,000 in savings each month, and my eventual goal would be to FATFire after accumulating $6-10M, and live of a ~4% withdrawal a year.