Save
Tax planning crucial for Aussie expats
Despite being the furthest thing from an adventurer’s mind, financial strategy is crucial for any expat planning on returning to Australia, an industry expert has advised.
Tax planning crucial for Aussie expats
Despite being the furthest thing from an adventurer’s mind, financial strategy is crucial for any expat planning on returning to Australia, an industry expert has advised.
HLB Mann Judd’s tax partner, Peter Bembrick, has outlined that living and working in another country, even for a short period of time, requires careful planning which should be done well in advance.
“This is particularly important in an environment where the government is looking at different ways of broadening the tax base,” he said.
“For example, we’ve already seen plans to introduce capital gains tax on the family home for expats, which would have included removing their access to the much-loved ‘six-year absence rule’,” Mr Bembrick noted.
The finance expert believes there are a number of technicalities that could adversely affect Aussies who have worked abroad, which can be minimised through planning.
“One consideration for people is what to do with any pension savings they have from another country, such as the United Kingdom, and how to bring the funds back into Australia in order to roll them into the tax-advantaged superannuation system here,” he said.
“Another common situation is when people have changed tax residency and paid tax in another country, they may be able to claim a credit for the foreign tax paid upon their return but only if they have the proper records and structures in place,” he continued.
An advantage of being an Australian is the reduction of capital gains tax, according to Mr Bembrick. However, it also means all of one’s foreign salary and investment income will be taxed in Australia with a credit to any foreign tax paid on the income.
Other areas for expats to consider include:
Shares or managed funds – If someone becomes a non-resident, these types of investments are generally treated under the CGT rules as having been sold at their market value at the time that tax residency changed, triggering deemed capital gains or losses, HLB Mann Judd has outlined.
Investment properties – The CGT discount on the sale of investment properties is not available for any period after 8 May 2012, during which someone is a non-resident. For investment properties already owned at the time an individual left Australia to move overseas, there needs to be an apportionment of the CGT discount for the relevant periods. The same applies for periods between the date they return to Australia and a later property sale.
Withholding tax – Non-resident withholding tax is payable on unfranked dividends, interest and managed funds distribution, the firm has noted. However, any withholding tax deducted should be available to claim as a credit against income tax payable in the other country.
SMSFs – If members and trustees of an SMSF cease to be Australian residents, then the fund can become non-complying. An example of this would be a couple who moves overseas for several years and loses their Australian tax residency status.
HLB Mann Judd outlined that careful planning is required to anticipate and overcome the negative consequences that might otherwise arise.
RELATED ARTICLES
About the author
About the author
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- ACE25 The Accounting Conference and Exhibition
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian AI Awards
- Australian Aviation Awards
- Australian Aviation Summit
- Australian Broking Awards
- Australian Cyber Awards
- Australian Cyber Summit
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Law Forum
- Australian Space Awards
- Australian Space Summit
- Australian Wealth Management Awards
- Australian Wealth Management Summit
- Better Business Awards
- Better Business Summit
- Broker Innovation Awards
- Broker Innovation Summit
- Budget Summit
- Commerical Finance Awards
- Corporate Counsel Summit
- Defence & National Security Workforce Awards
- Fund Manager of the Year Awards
- ifa Excellence Awards
- Lawyers Weekly 30 Under 30 Awards
- New Broker Academy
- Partner of the Year Awards
- Partner Summit
- REB Awards
- Rising Star Awards
- SME Bootcamp
- SMSF Technical Strategy Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Finance Summit
- Women in Law Awards
- Women in Law Forum
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.