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Australians leaving the country need to understand what makes them taxable by the Australian Tax Office when they are overseas.

Just because you are leaving Australia for an extended period, it does not mean that you become a non-resident for Australian Tax purposes and therefore your Australian tax obligations are over.

Getting our advice before you make the move, will save you a lot of grief, later.

There is a voluntary reporting and payment mechanism using your myGov Account, if you have any HELP or HECS debts. Please refer to https://www.studyassist.gov.au/paying-back-your-loan/what-if-i-move-overseas

We cannot help with HECS and HELP reporting, as it is dealt via your myGov account. You should not share your myGov account details with anyone.

Tax Residency – Are you or are you not?

A plethora of recent legal cases surrounding tax residency proves, that this is a highly contentious area in tax law and that each person’s circumstances may be unique to that individual. For example, in a Full Federal Court decision,  Harding v Commissioner of Taxation [2019] FCAFC 29, it has been decided that temporary accommodation overseas can be a permanent place of abode.

Why is the permanent place of abode important?- that is because it is one of the key tests in working out your tax residency.

More information re Tax Residency can be found at:

An early tax-return can be completed to resolve the income tax situation in advance of the normal end of financial year, which is usually 30th June.   Non-residency in part of the year will also reduce your liability to the Medicare Levy and its surcharge, as well as access to the tax-free threshold.

For people owning Australian shares, leaving for overseas can mean a deemed disposal which can make you liable for CGT upon leaving, on sale or this can be deferred until the person either disposes of the shares or arrives back in Australia, when the capital gain or a loss will be realised and can create a taxable situation.  The question is – what is the best option for the taxpayer?

Australian Accountants manages tax returns for expatriates whose homes or investment properties are rented.  The question our non-resident clients often ask is – “Can they keep the losses caused by negative gearing?”

Another very significant issue facing Australians going overseas is the question of what happens if they sell their property when they become a non-resident.  In May 2012 the government brought in sweeping changes which affect the sale of properties in Australia owned by non-residents.  It is worth contacting us to find out exactly where you sit with any sale.  Recently proposed changes by the Coalition re scrapping of CGT exemption on departing Australians, themselves seemed to have been scrapped, at least for the time being. Don’t leap in to selling your property and find out that you are unexpectedly faced with a much higher tax bill than you imagined.

After a consultation with one of our tax advisers whether you visit our office or call from overseas via skype/telephone or we communicate via e-mail you will be able to determine your residency status and what you need to do before travelling overseas.

Foreign resident tax rates 2017–18

Taxable incomeTax on this income (Medicare Levy of 2% Not applicable)
0 – $87,00032.5c for each $1
$87,001 – $180,000 $28,275 plus 37c for each $1 over $87,000
$180,001 and over$62,685 plus 45c for each $1 over $180,000

For in-depth advice about the change from being an Australian tax resident to a non-resident please call Australian Accountants on 02 9415 1118 today.