Are there any tax (or other) advantages for an Australian living abroad to holding investments (liquid investments such as index funds, etc) outside of Australia?
Just reasoning it out in my head...
Presumably, you have to have your investments held in *some* country, and then that country's tax rules will apply, so you're probably not going to get out of paying tax, whether it's in Australia or the US or Canada or wherever. (And I suppose some would argue that that's fair, as, for better or worse, our taxes partly fund infrastructure, etc that we rely on to support the economy, but I digress.)
Perhaps the taxation of capital gains in another country will be *slightly* lower than Australia, though most developed countries seem to converge on around 25-35%, so it wouldn't be a big difference. But I guess a few percent less could make a difference over many years of compounding growth.
But if you haven't chosen one particular country outside of Australia to settle down in, and lock in the low tax rates, it doesn't seem like you'd get much of an advantage to holding outside of Australia over the time period it would take to realise growth (ie. 5-10+ years).
If anything, you'd lose money on the transaction costs of constantly switching every time you move country. You'd really have to move to a lower taxed country and stay there for a long time for it to be any benefit.
Being something of a digital nomad myself, and planning to live in multiple countries over the next 5-10 years, it seems like I'd be better off keeping my funds domiciled in Australia and sending all my savings to Austalia via, say, TransferWise.
Advantages:
* Simplicity
* Zero transaction costs (apart from the currency conversion fee and spread)
I guess for short-term cash I'd still try and get a bank account in whichever country I reside in, for depositing income from jobs, convenience and in case of emergencies.