Understanding tax in Australia for UK expats

Wednesday, June 9, 2021 by Shane Macfarlane CA

Thinking about moving to Australia? As exciting as it can be, it can also be very stressful to have to plan everything. From visas to property to transport, it is imperative that you get everything sorted before you move, and this can be very confusing.

Although you might not have thought about it yet, you need to understand your tax commitments in both the UK and Australia before you make the big move. The last thing you want on your plate is the added stress of an unexpected tax bill.

With that in mind, let’s take a look at some of the tax requirements you need to know if you are thinking about becoming an expat in Australia.

Tax in Australia as an expat

When you first move to Australia, you will be considered a ‘foreign tax resident’. As this type of resident, you will only be required to pay tax on income or capital gains that have been made in Australia.

Once you have lived in Australia for 6 months, you will be considered a tax resident. If you are unsure about your status, the Australian Government Taxation Office has a useful online tool that will be able to help.

If you are considered a ‘tax resident’, then your worldwide income will be taxable.

Paying tax in the UK as an expat in Australia

Because you are no longer living in the UK, you may think you no longer have to pay taxes in the UK. However, unfortunately, this is not the case.

If you are considered a tax resident in the UK, you will have to pay tax in the UK for the year that you move to Australia. However, the UK has recently released a complex list of rules in the ‘Statutory residence test’, which includes special rules that may apply to you.

Confused about tax?

These rules and regulations can be incredibly confusing, so if you are struggling to make head or tail about how much tax you will have to pay when you move to Australia, contact our expert team today. We are more than happy to help you understand your tax obligations.

Shane Macfarlane CA
Follow me

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.