Email Contact Us

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please Type Topic Into Search Bar

Moving to Australia? Will you be subject to tax on overseas assets?

Moving to Australia
User Photo
Hugo Van Zyl
Temporary residents are typically deemed residents when their spouse is Australian tax resident i.e. holds passport or pay Social Security. A South African arriving in Australia to join his or her "spouse" in term of Migration Act may be a "common law" or living together in a relationship spouse. Does the tax act follow the wider Migration Act definition of spouse which can be a person you habitability shared a house with, or been in a long term relationship with?
Reply 566 weeks ago
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
Sara Rumble
Your residency status for tax purposes will determine if you are taxed on the income from overseas assets and/or sale of assets captured under Australia's Capital Gains Tax (CGT) Regime.

If classified as a resident for tax purposes, in general terms, the answer is yes you will be liable for tax on all overseas income and in the majority of cases CGT on sale of CGT Assets.

As a temporary or non resident for tax purposes a tax liabiliy will not apply to overseas income and CGT events.

It is important to relaise that tax residency is evaluated on a different basis from general Australian residency and professional advice should be sought
Leave a Comment 594 weeks ago

User Photo
Question Owner
I would like to add that your home or primcipal place of residence may be exempt from CGT for a period of six years even if you are deemed an Australian Residnce
Reply 592 weeks ago
User Photo
Mel James
Yes, you will be taxed on overseas assets if you become a permamnent resident of Australia. Income from those overseas assets will be returned in your Australian Income Return with a credit (subject to some limits) fro any income paid in the jurisdiction where the asset is located.
You would also need to value your overseas assets as at the date you take up resdiency in order to determine a :cost base" of the asset , requirede for any future calculation of Capital Gains.
You should seek specific advice before embarking on a change of residency.
Leave a Comment 593 weeks ago

User Photo
Charles Sondergaard
We assist many S Africans with their tax and relocation matters. S Africa particularly has issues as they can cash in their retirement annuities and pensions when they become tax resident of Australia but there are rules on how to calculate the tax payable on these particular assets. When you become Australian Tax Resident you are deemedd to acquire all your overseas assets at market value that day.
Leave a Comment 593 weeks ago

User Photo
Greg Brown
Mel & Charles have highlighted the importance of planning

The retrospective valuation of overseas assets that are deemed to be acquired at the time of becoming an Australian resident for taxation purposes can be burdensome and far more expensive that if it is done at the same time as you become resident

Proper planning may also may also allow for restructuring of asset ownership before they would otherwise become Taxable (within the context of the legislation)
Leave a Comment 593 weeks ago

User Photo
Fred Rollo
As previous posts have highlighted, 'moving to Australia' in the context of becoming 'resident' is a CGT trigger that can bring all assets personally owned (as well as closely held companies that might concurrently become resident or fall within the 'controlled foreign company' rules, and trusts that fall within the 'controlled foreign trust' rules), into the Australian tax net.

The Question Owner has correctly identified that a ' all facts relating to the taxpayer' is required to 'ensure that residency status is correctly determined'. Unlike the US situation where citizenship is the key factor that determines the tax status of individuals, the Australian factors focus on the concepts of residence of the taxpayer and the source of their income.

As intimated by Sara, Mel and Greg, planning for HINWIs 'moving to Australia' requires careful consideration of both the residence and source concepts and the special rules regarding foreign corporate and trust structures.

If the stakes are high enough, foreign assets (including corporate and trust structures) and income can be effectively quarantined from Australian taxes. However, this can be costly and requires a high degree of understanding and discipline on the part of the HINWI to ensure that the planning does not later unravel.
Leave a Comment 592 weeks ago


View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

Contact Us Today