When you leave Australia
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Capital gains on your assets
If you leave your home in Australia temporarily and rent it out, you can continue to treat it as your main residence for up to six years for capital gains tax (CGT) purposes. If you don’t rent out your vacated home, you can treat it as your main residence for an unlimited period.
If you cease to be an Australian resident while overseas, we deem some of your assets – generally those not considered taxable Australian property – to have been disposed of for CGT purposes. This may mean you become liable to pay CGT.
You can choose not to have this deemed disposal apply. But if you do eventually dispose of the asset, we take into account the whole period of ownership – including any period when you're not an Australian resident – when we calculate a gain or loss for CGT purposes.
Cancelling private health insurance
The Medicare levy surcharge applies to Australian residents who have incomes above the surcharge thresholds and do not have an appropriate level of private patient hospital cover.
So, 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 threshold.
You should contact your health fund to work out the amount of premium you expect to save by cancelling or suspending your cover. Compare it to the surcharge you may have to pay.
You and all your family dependants must have private patient hospital cover to avoid paying the surcharge. Cancelling or suspending cover for yourself will mean you and your spouse may each still be liable for the surcharge if your combined income for the purposes of the surcharge exceeds the family surcharge threshold.
Travel health insurance
Travel insurance is not private patient hospital cover for the purposes of the Medicare levy surcharge. Private patient hospital cover does not include cover provided by an overseas fund.
Exempt foreign employment income and the surcharge thresholds
Although your foreign employment income may be exempt from tax, we still take it into account when we determine your taxable income for the purposes of the Medicare levy surcharge.
John is single and an Australian resident. In 2015-16, he has:
- no private patient hospital cover
- exempt foreign employment income of $75,000
- taxable income of $20,000.
John's income, for the purposes of the Medicare levy surcharge, is $95,000. As this falls in the income range of $90,000 – $105,000 for a single person, he is liable for the Medicare levy surcharge of 1.0%.
The surcharge is 1% of $20,000 (his taxable income), which equals $200.
End of example
Higher education and trade support loans
From 1 January 2016, if you have moved overseas and have a Higher Education Loan Programme (HELP) or Trade Support Loan (TSL) debt, you will have the same repayment obligations as those who live in Australia. This applies if you already live or intend to move overseas for a total of more than six months in any 12-month period.
You will need to update your contact details using our online services via myGov. You will also be required to make compulsory repayments towards your debt from 1 July 2017.
If you are an Australian citizen or permanent resident heading overseas, your super remains subject to the same rules, even if you are leaving Australia permanently. This means you cannot access your super until you reach preservation age and retire, or satisfy another condition of release.
You should check your super regularly and combine any accounts you no longer need. You can do this through our online services, accessible via myGov. Combining multiple super accounts means you don't have to pay multiple sets of fees and charges.
If you have a small super account that you want to keep with your super fund, contact your super fund and tell them. This will prevent it from being transferred to us as unclaimed super.
If you are planning on moving permanently or indefinitely to New Zealand, you can leave your super in Australia or transfer it to a New Zealand KiwiSaver scheme from a participating Australian super fund.
If you are a trustee of a self-managed super fund and you intend to travel overseas for an extended period, check before you leave that your fund will continue to meet the definition of an Australian super fund.
If you intend to leave Australia soon, or have recently left, it could have implications for capital gains on your assets, higher education and trade support loans, Medicare levy surcharge and self-managed super.