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Australian Tax- The HECS, HELP, and TLS Shirt Tail Effect



Shane Macfarlane, Tax Advisor, Ho Chi Min City, Viet Nam, TaxConnections

Many overseas destinations welcome young Australians to live and work. For the best and brightest of Australia’s young, the expat experience is a rite of passage.

However, the best and brightest young Australians often have a HELP debt or Trade Support Loan (TSL). A visit to the Australian Taxation website shows your HELP and TSL debts are a trailing shirt tail that forever ties you to your home until they’re paid off.


In summary, the website says:

If you have a HELP or TLS debt, you must file an Australian tax return and that puts you into complicated territory as the following paragraphs show.Your Australian tax return has to show all income, even your overseas income, earned in the Australian tax year. It does not matter that you have paid tax on that income in your host country.

To avoid double taxation, expat tax returns claim the foreign tax exemption and that in itself can be a work of art because the tax accounting years in your host country might be different to the Australian tax accounting year.Is there a way around this?

Maybe. It depends on your circumstances and timing.

It might be worthwhile paying your HELP or TLS debt in the tax year before you leave (i.e. before 30 June). If your HELP or TLS debt is already repaid in the tax year you leave you will be able to lodge your tax return early rather than wait until after the end of the financial year (so long as you don’t expect income from other Australian sources while you are overseas).

That’s one loose end tied up that you won’t have to worry about the headaches a HELP or TLS can cause you at the other end. And of course if you’re due a refund a few more dollars won’t hurt – indeed it might be where you can round up the readies to repay that loan you took to get rid of the HELP or TLS debt the tax year before.
It’s a tax planning and financial issue – one you should take advice about.

We can all see where this is heading, right?

You will need expert help with your Australian tax return when you’re working overseas.

Why not hire your tax agent and seek advice now, before you leave? We’re registered Australian tax agents, so we can prepare your return, calculate what you’ll be up for and lodge it for you, no matter where you’re located. And when we say calculate what you’re up for that includes our fee – it’s always an upfront quote.

Even if your trip is just in the planning stage there’s no reason why you should not use us as your tax agents now. We can still prepare and lodge your returns while you’re still at home and when you head overseas you already have an accountant looking after you no matter where you’re headed.

Have a question? Contact Shane Macfarlane. Your comments are always welcome!

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