If you have been living in Australia, you intend leaving Australia soon, or you have recently left Australia, there are things you need to do to get your tax affairs in order.
Understanding your residency status
If you are unsure of your residency status, use the Determination of residency status - leaving Australia tool to work out how much tax you are liable to pay on your personal income in Australia.
Changing from being a resident to a foreign resident
If your status has changed from resident to foreign resident during the income year, answer 'yes' to the question 'Are you an Australian resident?' on your tax return. This ensures you are taxed at resident rates for the tax year. Your non-residency for part of the year is taken into account by a reduction in your tax-free threshold.
In order to claim a tax offset for a dependent spouse, you must both be Australian residents for tax purposes. You will need to reduce your claim to take into account the period you were both foreign residents of Australia.
Foreign residents of Australia do not have to pay the Medicare levy, so you can claim the number of days that you are not an Australian resident during a tax year in your return as exempt days.
From the date you cease to be an Australian resident, there is no need to disclose your foreign source income in your tax return. Also, all Australian sourced interest, dividends and royalties derived after you ceased to be an Australian resident are subject to the withholding tax provisions as a final tax and should not be included in your tax return.
Lodging your return early
If you are leaving Australia in certain circumstances you can lodge your return early - refer to Leaving Australia - lodging your return.
Capital gains and going overseas
If you have been an Australian resident but are leaving Australia while retaining assets here, you need to be aware of the capital gains tax (CGT) implications and your options:
- If you leave your home in Australia temporarily you may be able to continue to treat it as your main residence for up to six years for CGT purposes if you are using it to produce income by renting it out.
- If you go overseas and cease to be an Australian resident, some of your assets (generally those that are not considered taxable Australian property) are deemed to have been disposed of for CGT purposes, which may mean you become liable to pay CGT. You can choose not to have this deemed disposal apply. However if you do eventually dispose of the asset, the whole period of ownership, including any period in which you are not an Australian resident, will be taken into account in calculating a gain or loss for CGT purposes.
Superannuation
Temporary residents may be able to access their superannuation information if they are leaving Australia permanently.
Overseas travel and the Medicare levy surcharge
If you cancel your private health insurance while travelling overseas, you may be liable for the Medicare levy surcharge if your income exceeds the relevant Medicare levy surcharge threshold - refer to Overseas travel and the Medicare levy surcharge.
Higher Education Loan Program (HELP) and Financial Supplement (FS) debts
If you have a HELP or FS debt and you go overseas, your debt will continue to be indexed each year until it is paid off. You can still make voluntary repayments from overseas - refer to Repaying your HELP debt 2012-13 or Repaying your Financial Supplement debt 2012-13.
More information
Proposed measures
The government is continually reviewing international tax arrangements. For more information about how potential international legislative changes may affect you, refer to New legislation.
If you need help in applying this information to your own situation, contact us by phone.
Last Modified: Friday, 31 August 2012