tax issues to consider

Leaving Australia to work overseas? Here are some tax issues to consider

Update – 9th May 2017: Please note that the Australian government handed down it’s 2017 Australian Federal budget today, with proposals to stop non-residents from being able to access the main residence capital gains tax exemption (discussed in our original article below) from 9th May 2017.

Existing properties held by Australian expats and non-residents will continue to be exempt but only until 30 June 2019. After that date, any existing properties held by non-residents (as at 9th May 2017) will become subject to capital gains notwithstanding that the property may continue to be that taxpayer’s main residence. It is expected that this will cause a large number of Australian expats to re-evaluate how long they will continue to live and work overseas in light of these changes.

To learn more about these and other 2017 budget measures proposed, take a look at our recent blog post 2017 Australian Federal Budget – Expats the Clear Losers.

Source: Budget Paper No 2, p 27.

Original article below

There are a lot of things to think about when you move overseas, and to help you tackle those admin-related tasks, we’ve come up with a checklist of things you should take into consideration before you get on the plane.

Renting out your Australian home

If you move overseas, you are able to continue to treat your home in Australia as your main residence for up to six years if you decide to rent it out. This will help you to avoid capital gains tax payments.

However, if you give up your Australian residency while you’re overseas, then you might have to pay capital gains tax on your property.

Medicare levy considerations

If you move overseas, it makes sense to cancel your Australian private health cover. However, if you remain an Australian resident, and your income is over the surcharge threshold, then you may still have to pay the levy on your expat tax returns in Australia.

The best way to sort this out is to check with your private health insurance company as to whether you can suspend your cover and how much this would cost. Then compare these prices with how much you need to pay with the Medicare levy surcharge and see which is the greater cost. However, double check whether simply suspending your cover will get you out of paying the Medicare levy surcharge, as every policy is different.

Repaying your student loans

Moving overseas doesn’t get you out of paying your student loans. From the beginning of this year, you will need to make the same repayments towards your student loans as you would if you were living in Australia.

You need to update your contact details through the myGov online system and then start making contributions from the middle of next year.

Thinking about superannuation

Even if you are leaving Australia permanently, you still won’t be able to access your superannuation until you are retirement age. However, it is best to roll your superannuation accounts in to one before you leave, so you are not paying fees on multiple accounts.

There is a lot to think about when you move overseas, but we hope we’ve helped you to get the ball rolling on some of the admin tasks you need to tackle before you pack your bags. Of course, if you need any help with sorting the above points of issue, or need further assistance with any other tax concerns before your departure, give us a call and we’ll be more than happy to lend a hand.

Shane Macfarlane
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Shane Macfarlane

CEO & Founder at Expat Tax Services
Shane's an Australian Chartered Accountant and Australian expat tax specialist who's also an expat himself (based in Asia).Shane's passionate about tax and legitimate tax minimisation, particularly as it relates to Australian expats who are often subject to high rates of tax back home in Australia.Beyond tax and accounting, Shane's an entrepreneur, having devised, created and founded a successful accounting startup, Fifo Workpapers (acquired by accounting software giant, Intuit inc. in 2013)

In short Shane's a tax and software techno-geek, who recognised that Australian expats were unable to obtain the specialist advice and quality service, that they needed from their accountants. Accordingly, Shane founded Expat Tax Services to provide Australian expats with access to specialist, quality advice at fair and reasonable prices (no hourly rates, fees quoted upfront with unlimited support included) . . . receive the support and advice you need without having to take second-mortgage to pay your accountant's bill! Speak to Shane & the team today.
Shane Macfarlane
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