The ATO are so ruthless and aggressive. I wanted to rent my place out and go travelling indefinitely but I’ve found out I could lose my tax residency. If you want to maintain Aussie tax residency they make it difficult but if you want lose it and become a foreign tax resident it’s just as difficult. It all depends on how much they stand to extract from you. For example if I rent my apartment out and travel, if I’m not in Australia for 183 days of the year they could audit me and say that I’m a foreign resident even though I still have all ties with Australia. Then I lose the tax free threshold and pay 4 times as much tax. However, if I want to become a foreign tax resident so I sell my property and put all money in the bank and cut all ties here thereby only paying 10% on bank interest they will make it extremely difficult because they will make less out of me. It’s absolutely disgusting and draconian. I feel like a financial prisoner here.
I would strongly suggest seeking some professional advice here, as it's not as draconian as you suggest. It's just a matter of crunching your numbers and working out what's best for you. If you travel and don't actually cease your tax residency by commencing residency elsewhere, then it's unlikely that you would have actually broken ties with Australia.
Thanks for the clear information. Can you do a video about considerations before selling or keeping your primary residence before leaving Australia. For example, sell primary residence to avoid large capital gains, then buy investment property with a different structure etc. Thanks
But isn't that making your residency status as non-tax resident will make your Australian-sourced income be taxed more since there's no threshold for non-tax? Unless someone have a lot less income from Australia than other countries
Excellent question, and yes you certainly need to do your homework to determine which is more favourable. However, in the event that you wanted to remain a tax resident of Australia, you would then need to explore; The Double Tax Agreement with your country of residence and Australia, Tax Residency requirements in the country you're residing in, and any other regulations, as this may remove it as an option. Also important to note that even as a non-resident of Australia you generally have options to reduce your tax liability even without the tax-free threshold such as with superannuation, and prepayment of interest on investment loans.
Thanks for your question here. This is a very broad question so I'd certainly suggest seeking professional tax advice here to consider your own situation. In general, someone can be deemed to be an Australian tax resident based on the Domicile and Resides Tests, which explores where an individuals' ties are. For example, this could include time and frequency of travel to Australia, the reason for said travel, living arrangements in Australia etc. The Resides test would look at living arrangements overseas, so there is a great deal to consider here. You can check out our previous webinar on the topic here - ua-cam.com/video/9MsYGc2Sl08/v-deo.html&t, which covers the latest proposed changes. We'll be updating everyone as soon as new information is released.
It's very unlikely that this in isolation would be enough to deem you an Australian tax resident. If you're in the 'grey' in a number of areas, then it may be a good idea to consider this if you can transfer it to another jurisdiction such as Singapore.
Hi, Thanks for the video.. We as a family want to be in another country for some years and would like to come back to australia.. i wont be doing in any work there.. but ill be managing my share portfolio which is located in australia.. i don't want to cut ties with australia and want to remain as a tax resident.. i don't have any rental properties.. can i still maintain my tax residency status in australia?
Yes, generally speaking you could retain your shares as a resident and not complete a deemed disposal, which would mean Australian tax would eventually apply in future. There is a lot to consider with such a move, so I would certainly suggest you speak with your Tax Adviser and run the scenarios.
In many cases, the self-declaration responsibility would be on the individual in the event of a residency audit. Memberships alone are unlikely to be sufficient to confirm residency.
The ATO are so ruthless and aggressive. I wanted to rent my place out and go travelling indefinitely but I’ve found out I could lose my tax residency. If you want to maintain Aussie tax residency they make it difficult but if you want lose it and become a foreign tax resident it’s just as difficult. It all depends on how much they stand to extract from you. For example if I rent my apartment out and travel, if I’m not in Australia for 183 days of the year they could audit me and say that I’m a foreign resident even though I still have all ties with Australia. Then I lose the tax free threshold and pay 4 times as much tax. However, if I want to become a foreign tax resident so I sell my property and put all money in the bank and cut all ties here thereby only paying 10% on bank interest they will make it extremely difficult because they will make less out of me. It’s absolutely disgusting and draconian. I feel like a financial prisoner here.
I would strongly suggest seeking some professional advice here, as it's not as draconian as you suggest. It's just a matter of crunching your numbers and working out what's best for you. If you travel and don't actually cease your tax residency by commencing residency elsewhere, then it's unlikely that you would have actually broken ties with Australia.
Thanks for the clear information. Can you do a video about considerations before selling or keeping your primary residence before leaving Australia. For example, sell primary residence to avoid large capital gains, then buy investment property with a different structure etc. Thanks
Sure - stay tuned.
As promised, here is the video exploring the pros and cons of keeping vs selling your primary residence when leaving Australia.
But isn't that making your residency status as non-tax resident will make your Australian-sourced income be taxed more since there's no threshold for non-tax? Unless someone have a lot less income from Australia than other countries
Excellent question, and yes you certainly need to do your homework to determine which is more favourable.
However, in the event that you wanted to remain a tax resident of Australia, you would then need to explore; The Double Tax Agreement with your country of residence and Australia, Tax Residency requirements in the country you're residing in, and any other regulations, as this may remove it as an option.
Also important to note that even as a non-resident of Australia you generally have options to reduce your tax liability even without the tax-free threshold such as with superannuation, and prepayment of interest on investment loans.
how long do you need to stay in AU and or in Overseas ? You said you don't have to stay for 183 days in Au? can you explain further.
Thanks for your question here. This is a very broad question so I'd certainly suggest seeking professional tax advice here to consider your own situation.
In general, someone can be deemed to be an Australian tax resident based on the Domicile and Resides Tests, which explores where an individuals' ties are. For example, this could include time and frequency of travel to Australia, the reason for said travel, living arrangements in Australia etc. The Resides test would look at living arrangements overseas, so there is a great deal to consider here.
You can check out our previous webinar on the topic here - ua-cam.com/video/9MsYGc2Sl08/v-deo.html&t, which covers the latest proposed changes. We'll be updating everyone as soon as new information is released.
Would somebody need to cancel their Australia licence also?
It's very unlikely that this in isolation would be enough to deem you an Australian tax resident.
If you're in the 'grey' in a number of areas, then it may be a good idea to consider this if you can transfer it to another jurisdiction such as Singapore.
Thanks for your reply, I had been wondering about that.
@@shaneoconnor1407 You're most welcome - thanks for your question. I'm sure there are many that may be wondering the same.
Hi,
Thanks for the video..
We as a family want to be in another country for some years and would like to come back to australia.. i wont be doing in any work there.. but ill be managing my share portfolio which is located in australia..
i don't want to cut ties with australia and want to remain as a tax resident.. i don't have any rental properties..
can i still maintain my tax residency status in australia?
Yes, generally speaking you could retain your shares as a resident and not complete a deemed disposal, which would mean Australian tax would eventually apply in future.
There is a lot to consider with such a move, so I would certainly suggest you speak with your Tax Adviser and run the scenarios.
How the F does the ATO know about your memberships? Sound like a dictatorship.
In many cases, the self-declaration responsibility would be on the individual in the event of a residency audit. Memberships alone are unlikely to be sufficient to confirm residency.
How can I contact you?
You can email me at jarrad.brown@gfcadvice.com