Australian “Significant Investor” Residence Visa Applicants Need To Consider Tax And Estate Planning Issues.

Australia’s 2012 “significant investor” residence visa scheme has attracted some 1,000 applicants who have committed to invest AUD4 billion in businesses or other complying investments. To date, the vast majority of applicants have been from Chinese nationals.

The scheme might have been expected to attract some interest from Russian entrepreneurs and investors. However, Australia’s personal tax rates may be a distraction (an effective maximum marginal rate of 49% currently applies to income in excess of AUD180,000 pa). Furthermore, the current geopolitical situation around Ukraine and the flight MH17 atrocity may now deter potential applicants who might be regarded as associates of the Russian leadership.

High net worth applicants for the “significant investor” residence visas should seek taxation and estate planning advice in connection with the structuring of both their proposed investments in Australia and their offshore assets.

Resident visa holders will need to consider whether their visa and patterns of visiting Australian might cause them to be regarded as an Australian resident for tax purposes. In that event, they could be liable to Australian tax on their worldwide income. Astute pre-planning may limit that exposure.

Another major factor is that Australia’s effective heirship rules. Each Australian State has testator’s family maintenance provisions that allow close family members and some others to contest a will on the basis of a claimed obligation to provide for the person. These provisions need to be considered when making any will in connection with Australian based assets.

Director Principal of Rollo & Company Pty Ltd, a CPA practice that specialises in Australian & international tax, estate and succession planning, professional education, negotiation and mediation, mentoring – executive coaching, and higher education consulting. We also provide the Student Ombudsman Service at Macquarie University in Sydney.

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