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.
About the author
About the author
Tax saving
First in the world: SA imposes EV tax
The South Australian government is the first government in the world to introduce an electronic vehicles tax following an announcement by the treasury. ...Read more
Tax saving
5 tips as tax deadline looms
Australians are being warned that they have just two weeks left to get their finances in order if they have not posted a tax return yet. ...Read more
Tax saving
ATO warns businesses of JobKeeper scam
The ATO is warning the community about a JobKeeper scam which is asking members to enter personal information. ...Read more
Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more
Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more
Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more
Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more
Tax saving
Government rebuffs regional allowance and tax concession reform
A review’s findings into the viability of area tax concessions and payments for regional and remote Australians has had its recommendations shut down by the same government who requested the report...Read more
Tax saving
First in the world: SA imposes EV tax
The South Australian government is the first government in the world to introduce an electronic vehicles tax following an announcement by the treasury. ...Read more
Tax saving
5 tips as tax deadline looms
Australians are being warned that they have just two weeks left to get their finances in order if they have not posted a tax return yet. ...Read more
Tax saving
ATO warns businesses of JobKeeper scam
The ATO is warning the community about a JobKeeper scam which is asking members to enter personal information. ...Read more
Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more
Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more
Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more
Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more
Tax saving
Government rebuffs regional allowance and tax concession reform
A review’s findings into the viability of area tax concessions and payments for regional and remote Australians has had its recommendations shut down by the same government who requested the report...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
