Tax changes for expats

[Straight8]

6 hours ago, 4MyEgo said:

From my understanding on the ATO's website, if I recall correctly it is 183 days within a financial year, this would be simply so they can work out your tax within the financial year, however I also did read a court case which said the 183 days was not a hard and fast rule.

 

Scroll down to 41 in the link below and have a read where a guy had two places, one in Australia and one overseas, but because he stayed in Australia for 183 days, he kept his residency.

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

 

26 and 23 are the main ones to consider, but everybody can have a good read through and confuse themselves, and remember, each time a decision is made, which is different to other court rulings, it sets a precedent in its self, which makes things even more confusing and there are scores of them 555

Thanks for that mate, kinda makes sense, doesn't it?

[4MyEgo]

15 hours ago, Stevemercer said:

I've done a bit more research which seems to confirm that retired Australian public servants (CSS or PSS members) remain Australian residents for tax purposes even if they live overseas for more than 6 months in any one tax year (see extract from case ruling referenced in a previous post below). This is a good situation for me.

 

This means they continue to pay normal Australian tax (including benefiting from the tax-free threshold). My previous fear was that I would become a 'non resident' for tax purposes, if I live in Thailand for more than 6 months in any one tax year. This means that I would lose the tax-free threshold and have to pay a flat tax of 32.5%. I would end up loosing thousands in tax, making it economically more difficult to live in Thailand.

 

3. An “Australian resident” means a person who is a resident of Australia for the purposes of the ITAA 1936. A “resident of Australia” is defined in s 6(1) of the
ITAA 1936 to mean:
(a) a person, other than a company, who resides in Australia and includes a person:
(i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside
Australia;
(ii) who has actually been in Australia, continuously or intermittently, during more than one half of the year of income, unless the Commissioner is satisfied that the person’s usual place of abode is outside Australia and that the person does not intend to take up residence in Australia; or
(iii) who is:
(A) a member of the superannuation scheme established by deed under the Superannuation Act 1990 (PSS); or
(B) an eligible employee for the purposes of the Superannuation Act 1976 (CSS); or
(C) the spouse, or a child under 16, of a person covered by sub-subparagraph (A) or (B);

 

An eligible employee is someone contributing to, or being paid a pension from, the CSS.

My interpretation on this is, if you remain an Australian Resident, you don not pay foreign resident tax.

 

Where is the extract ruling referenced from a previous post below that you mention ? 

[4MyEgo]

12 hours ago, vincent13 said:

Hope you're correct Steve as I'm a CSS pensioner also.

Where did you source the info in orange above?

What someone says is not always necessarily correct, although they do try, please have a look at the ATO link below and make your own mind up.

 

Things are always changing and this topic is way out of my league, but what I am reading on the ATO link below shows if you are residing overseas for more than 183 days, you will pay foreign resident tax, and if you want to claim that you are an Australian Resident for tax purposes, well the onus will always be on you to prove it.

 

Not wanting to burst anyone's bubble, but "pop" !!! 555

 

 https://www.ato.gov.au/law/view/document?docid=AID/AID20021064/00001

[Will27]

15 hours ago, Stevemercer said:

I've done a bit more research which seems to confirm that retired Australian public servants (CSS or PSS members) remain Australian residents for tax purposes even if they live overseas for more than 6 months in any one tax year (see extract from case ruling referenced in a previous post below). This is a good situation for me.

 

This means they continue to pay normal Australian tax (including benefiting from the tax-free threshold). My previous fear was that I would become a 'non resident' for tax purposes, if I live in Thailand for more than 6 months in any one tax year. This means that I would lose the tax-free threshold and have to pay a flat tax of 32.5%. I would end up loosing thousands in tax, making it economically more difficult to live in Thailand.

 

3. An “Australian resident” means a person who is a resident of Australia for the purposes of the ITAA 1936. A “resident of Australia” is defined in s 6(1) of the
ITAA 1936 to mean:
(a) a person, other than a company, who resides in Australia and includes a person:
(i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside
Australia;
(ii) who has actually been in Australia, continuously or intermittently, during more than one half of the year of income, unless the Commissioner is satisfied that the person’s usual place of abode is outside Australia and that the person does not intend to take up residence in Australia; or
(iii) who is:
(A) a member of the superannuation scheme established by deed under the Superannuation Act 1990 (PSS); or
(B) an eligible employee for the purposes of the Superannuation Act 1976 (CSS); or
(C) the spouse, or a child under 16, of a person covered by sub-subparagraph (A) or (B);

 

An eligible employee is someone contributing to, or being paid a pension from, the CSS.

I don't think this is correct although I hope it is.

 

Part 3 (a) states a person who resides in Australia.

 

This is also in the residency calculator:

 

"If you are not currently employed in a Commonwealth department (for example – Treasury, Department of Human Services) or statutory body (for example – CSIRO, ABC) you are not an active member of one of these funds."

 

And this example is provided:

 

"Ian took a redundancy package from his job in the Australian Broadcasting Corporation (ABC) – an approved authority for both the CSS and the PSS. While employed by the ABC, Ian contributed to the CSS and is now entitled to benefits from that fund on his retirement. He is currently self-employed. Although Ian is entitled to benefits from the CSS on his retirement, he is not currently employed by an approved authority for the CSS. For this reason, Ian is not an eligible employee in the CSS. Ian would answer 'No'."

 

 

[4MyEgo]

15 hours ago, Stevemercer said:

I've done a bit more research which seems to confirm that retired Australian public servants (CSS or PSS members) remain Australian residents for tax purposes even if they live overseas for more than 6 months in any one tax year (see extract from case ruling referenced in a previous post below). This is a good situation for me.

 

This means they continue to pay normal Australian tax (including benefiting from the tax-free threshold). My previous fear was that I would become a 'non resident' for tax purposes, if I live in Thailand for more than 6 months in any one tax year. This means that I would lose the tax-free threshold and have to pay a flat tax of 32.5%. I would end up loosing thousands in tax, making it economically more difficult to live in Thailand.

 

3. An “Australian resident” means a person who is a resident of Australia for the purposes of the ITAA 1936. A “resident of Australia” is defined in s 6(1) of the
ITAA 1936 to mean:
(a) a person, other than a company, who resides in Australia and includes a person:
(i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside
Australia;
(ii) who has actually been in Australia, continuously or intermittently, during more than one half of the year of income, unless the Commissioner is satisfied that the person’s usual place of abode is outside Australia and that the person does not intend to take up residence in Australia; or
(iii) who is:
(A) a member of the superannuation scheme established by deed under the Superannuation Act 1990 (PSS); or
(B) an eligible employee for the purposes of the Superannuation Act 1976 (CSS); or
(C) the spouse, or a child under 16, of a person covered by sub-subparagraph (A) or (B);

 

An eligible employee is someone contributing to, or being paid a pension from, the CSS.

Have a read of the link below, you might want to reconsider your thoughts ?

 

https://www.ato.gov.au/law/view/document?docid=AID/AID20021064/00001

[Will27]

1 minute ago, 4MyEgo said:

Have a read of the link below, you might want to reconsider your thoughts ?

 

https://www.ato.gov.au/law/view/document?docid=AID/AID20021064/00001

I know there's a lot of clauses likes ties to Australia etc, but in my mind, people who are spending 10 or 11 months

outside of Australia would have a difficult time trying to convince the ATO they're residents.

 

I can see a case if people spend maybe 7 months or so, but I think the majority of people living in Thailand would

spend 90%, if not more in Thailand.

 

Again, just have to hope you don't get a random audit because I doubt that the ATO would target pensioners and

low(ish) income earners.

 

 

[4MyEgo]

1 minute ago, Will27 said:

I know there's a lot of clauses likes ties to Australia etc, but in my mind, people who are spending 10 or 11 months

outside of Australia would have a difficult time trying to convince the ATO they're residents.

 

I can see a case if people spend maybe 7 months or so, but I think the majority of people living in Thailand would

spend 90%, if not more in Thailand.

 

Again, just have to hope you don't get a random audit because I doubt that the ATO would target pensioners and

low(ish) income earners.

 

 

I agree with what you are saying.

 

Personally, I think its a numbers game, but they will target who they think are gullible, i.e. as technology advances, they have the tools and the means to press a button and say, hey, how many Aussie's do we have living in say Thailand, and who is lodging their tax returns as an Australian Resident or not lodging one at all and the reason for it, e.g. oh he is a pensioner and has portability, therefore he doesn't have to pay tax on his pension (I don't know if pensioners have to pay tax or not, I would think not), next, he is on CSS or PSS but is saying he is an Australian Resident, but has been overseas for 2-3-4-5 years according to immigration, hmmm, best we start proceeding against him as he is a non resident for tax purposes as far as we are concerned, and if we cannot reach him, get the department to reduce his payments to non resident status until he contacts them, whereby they can tell him to contact us at the ATO, the onus is on him to prove his residency and back it up.

 

I nominated myself as a non resident, I am retired, I have my money in the stock market and pay no tax, although retired I still have clients contact me wanting me to do work for them, much to my surprise, and I do, suffice to say I made some good coin in 2016-2017 one year into my retirement from doing little, and am now in the process of doing my tax return for that financial year as a non resident, some would say I am an idiot, I say, it would take a simple audit of my bank account by the ATO to say, hey where did these amounts come from and they can back track the deposit to the clients via their banks, and naturally the clients would explain to the ATO that it was for work that I did for them, too easy, so best to come clean, pay the 32.5c in the $, claim some deductibles/depreciation, and pay them the tax, about 150,000 baht, there are a few ways to look at it:

 

1) I made additional income on top of my retirement earnings that are tax free, so its not really out of my pocket

 

2) If they ever knocked on my door, I would have nothing to hide, and I sleep well at night, except when the Mrs nudges me, here we go again 

 

3) I am in a good position, not having to pay tax from my investment in the stock market so I am already ahead, and I have already put the money aside to pay the tax

 

For those that want to argue their cases that they are Australian Residents, even though they live here for 90% of their time, then they will deal with the consequences when the time comes, i.e. if it comes, each to their own 

[Bikeman93]

3 hours ago, Will27 said:

I know there's a lot of clauses likes ties to Australia etc, but in my mind, people who are spending 10 or 11 months

outside of Australia would have a difficult time trying to convince the ATO they're residents.

 

I can see a case if people spend maybe 7 months or so, but I think the majority of people living in Thailand would

spend 90%, if not more in Thailand.

 

Again, just have to hope you don't get a random audit because I doubt that the ATO would target pensioners and

low(ish) income earners.

 

 

The legislation makes a distinction between people who have taken up residence in another country and those that are absent from Australia on multi-year holidays. (Retired politicians on taxpayer funded world trips). 

 

Another interesting loophole is you automatically maintain your tax residency if your spouse is currently employed with a CSS fund. (Retired politicians who got their young mistress a cushy CSS job while they are off travelling, good one BJ).

 

These are both evidence of corruption.

[Peterw42]

Work out your residency status for tax purposes

To understand your tax situation you first need to work out if you are an Australian or foreign resident for tax purposes.

"We don't use the same rules as the Department of Immigration and Border Protection". This means you:

• can be an Australian resident for tax purposes without being an Australian citizen or permanent resident.

If you have been living in Australia and have left or intend to leave, see Determination of residency status – leaving AustraliaThis link opens in a new window.

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=DORSLA&anchor=DORSLA/questions#DORSLA/questions

 

 

Determination of residency status – leaving Australia

 

 

This tool may help you determine whether you are an Australian resident for tax purposes.

 

All fields marked with * are mandatory

Are you under 16 years of age? *

Yes 

No X

 

Are you or your spouse:
• an eligible employee in the CSS (Commonwealth Service Superannuation) scheme, or
• a member of the PSS (Public Sector Superannuation) scheme? *

 

Yes

No X

 

Are / were you an Australian resident for tax purposes immediately before leaving Australia? *

 

Yes X

No

 

Are you a temporary Australian resident leaving Australia to live in another country? *

 

Yes

No X

 

Are you an Australian resident who is emigrating to live permanently in another country? *

 

Yes

No X

 

Where were you born? *

 

Australia X

Another country

 

What do you consider to be your home country ? *

 

 

Australia X

Another country

Don't have a home country

 

Do you plan to spend most of your time overseas based in any one place? *

 

Yes

No X

 

Do you plan to spend two years or more based in any one place while overseas? *

 

Yes

No X

 

 

Start of result

Result

You are an Australian resident for taxation purposes after you depart Australia.

As an Australian resident, you need to continue to lodge annual income tax returns in Australia. In this case you:

• Need to declare worldwide income that you earn, subject to the operation of any international tax treaties. That includes capital gains from the disposal of assets.
• Will be subject to income tax at resident rates, including the Medicare levy.
• Will be entitled to a full tax-free threshold.

 

You should keep a copy of this decision for your taxation records.

[4MyEgo]

29 minutes ago, Peterw42 said:

Work out your residency status for tax purposes

To understand your tax situation you first need to work out if you are an Australian or foreign resident for tax purposes.

"We don't use the same rules as the Department of Immigration and Border Protection". This means you:

• can be an Australian resident for tax purposes without being an Australian citizen or permanent resident.

If you have been living in Australia and have left or intend to leave, see Determination of residency status – leaving AustraliaThis link opens in a new window.

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=DORSLA&anchor=DORSLA/questions#DORSLA/questions

 

 

Determination of residency status – leaving Australia

 

 

This tool may help you determine whether you are an Australian resident for tax purposes.

 

All fields marked with * are mandatory

Are you under 16 years of age? *

Yes 

No X

 

Are you or your spouse:
• an eligible employee in the CSS (Commonwealth Service Superannuation) scheme, or
• a member of the PSS (Public Sector Superannuation) scheme? *

 

Yes

No X

 

Are / were you an Australian resident for tax purposes immediately before leaving Australia? *

 

Yes X

No

 

Are you a temporary Australian resident leaving Australia to live in another country? *

 

Yes

No X

 

Are you an Australian resident who is emigrating to live permanently in another country? *

 

Yes

No X

 

Where were you born? *

 

Australia X

Another country

 

What do you consider to be your home country ? *

 

 

Australia X

Another country

Don't have a home country

 

Do you plan to spend most of your time overseas based in any one place? *

 

Yes

No X

 

Do you plan to spend two years or more based in any one place while overseas? *

 

Yes

No X

 

 

Start of result

Result

You are an Australian resident for taxation purposes after you depart Australia.

As an Australian resident, you need to continue to lodge annual income tax returns in Australia. In this case you:

• Need to declare worldwide income that you earn, subject to the operation of any international tax treaties. That includes capital gains from the disposal of assets.
• Will be subject to income tax at resident rates, including the Medicare levy.
• Will be entitled to a full tax-free threshold.

 

You should keep a copy of this decision for your taxation records.

What you have missed here if you reside in Thailand, is the fact that they can check your passport for extension stamps, exit and re-entry stamps, and while you have said you consider Australia as your home country, you have just ticked what is convenient for yourself, suffice to say you should really have a read of 23 to 26, so scroll down and enjoy the clearer English as opposed to drop down or tick boxes, like on the lame ATO website, because legislation is (Law), and you can huff and puff all you like, but you won't blow their house down:

 

Happy reading Peterw42, noting there are no tick boxes in legislation:

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

 

 

[Will27]

5 minutes ago, 4MyEgo said:

What you have missed here if you reside in Thailand, is the fact that they can check your passport for extension stamps, exit and re-entry stamps, and while you have said you consider Australia as your home country, you have just ticked what is convenient for yourself, suffice to say you should really have a read of 23 to 26, so scroll down and enjoy the clearer English as opposed to drop down or tick boxes, like on the lame ATO website, because legislation is (Law), and you can huff and puff all you like, but you won't blow their house down:

 

Happy reading Peterw42, noting there are no tick boxes in legislation:

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

 

 

Yep, it's pretty easy to tick boxes to get an answer you want.

 

The issue will be when/if the ATO ask why you have spent only 24 days in Australia for the past 5 years

[4MyEgo]

9 minutes ago, Will27 said:

Yep, it's pretty easy to tick boxes to get an answer you want.

 

The issue will be when/if the ATO ask why you have spent only 24 days in Australia for the past 5 years

With them handing you a piece of paper saying you agree to pay $xxx,000 to the ATO within 14 days, please tick here thank you sir  

[Bikeman93]

Remember Australia was founded as a convict settlement.

 

I can see a time when we are only allowed weekend leave.

[Stevemercer]

22 hours ago, vincent13 said:

Hope you're correct Steve as I'm a CSS pensioner also.

Where did you source the info in orange above?

 

Ah well, it appears I was wrong. One can only live in hope!

 

To those who advocate owning up they are a non-resident, and paying tax at the non-resident rate, I can only assume they are on a tax free income, or are earning big bucks, so losing an additional minimum $6,000 per year ($120 per week) through loss of the tax free threshold makes no difference to their life style.

 

Well, good on ya, but some of us are not so fortunate.

[Will27]

2 hours ago, Stevemercer said:

 

Ah well, it appears I was wrong. One can only live in hope!

 

To those who advocate owning up they are a non-resident, and paying tax at the non-resident rate, I can only assume they are on a tax free income, or are earning big bucks, so losing an additional minimum $6,000 per year ($120 per week) through loss of the tax free threshold makes no difference to their life style.

 

Well, good on ya, but some of us are not so fortunate.

I don't think people are on here are advocating "owning" up to being a non-resident.

 

I only know of one person on here who has declared himself a non-resident and that's

pretty much because it suits his personal circumstances.

[Stevemercer]

I regret my comment above, but can't seem to delete it. Sometimes I get frustrated by the system and how is seems designed to benefit those on a high fixed income and penalise those on a low fixed income. Individuals just need to make an informed choice based on their own circumstances. It is good to have sufficient information so one can understand the options and the possible consequences of different courses of actions.

 

So long as we are aware of the risks, many might take the Thai approach - only worry about the consequences if they happen. Otherwise be happy with what you have and live in the moment. If the  worst happens, well deal with it then. Maybe it will never happen and you will never have to deal with the consequences of your actions. If you are caught out, blame it all on someone else.

 

Main pen rai.

[4MyEgo]

14 hours ago, Will27 said:

I don't think people are on here are advocating "owning" up to being a non-resident.

 

I only know of one person on here who has declared himself a non-resident and that's

pretty much because it suits his personal circumstances.

That would be me, that said, I had no choice but too declare myself a non resident based on my extensive research and what my accountant advised me, that is I was relocating to Thailand, with kids and all, cut and dry, and no way around claiming to be an Australian Resident.

 

If I had the choice to remain an Australian Resident for tax purposes, that would have been great, i.e. I could have hung onto my principal place of residence, I would have a tax free threshold of $18,200 as would my wife as she is an Australian Citizen, after both thresholds we would pay tax under the Australian tax system, we would be entitled to family A benefits as we have kids under 16 years of age, we would be entitled to Medicare, be enrolled in the electoral role so as to be able to put our votes forward come election times, local and federal, and of course not have to do the 2 year jail term for the OAP. I would also have my principal place of residence, whereby it would have been rented and the rent would have been added to my income from the ASX, naturally I would have to pay a % of the 50% future capital gains tax payable when I sold it, based on my yearly income, but the way they go about it in their legislation means they got my middle finger from the sale as it was a tax free sale, i.e. principal place of residence, and receive nothing in tax from me, except for the financial year 2016-2017 as mentioned before I made some money contracting for some clients, and that tax will be equal to what Stevemercer said he will lose as a foreign resident, again, I don't write up the rules, just follow them, and if Stevemercer is reading this, I know 1st hand what it is like to be less fortunate, right up till I turned 55 when I cashed in what I worked for all of my life, no hand outs, no inheritances, no lotteries, just worked my rear off from 14 to 55 and made a couple of right decisions as most people do, because a salary/wage is money to survive on, a 2nd job is for investing that money for a rainy day, but most people don't want a 2nd job and end up living off the OAP alone and 36% of OAP in Australia are living under the poverty line, the ones that are here are just making it last better, depending on the exchange rate, which isn't any good at the moment.

 

Having said the above, I was quite angry to have to sell my principal place of residence, but when I accepted the inevitable, i.e. having to declare myself as a non resident, it appealed to me to invest in the ASX so as not to pay any tax, i.e. they take away a hell of a lot of my presumed rights, so I pay no tax, this is all there legal doing, and for the life of me, I still cannot work out what benefit the Australian government gets from this, i.e. when I weigh up what I make per annum and pay no tax, and then weigh it up if I was to pay tax under the Australian taxation system, also taking into consideration family A benefits which I wouldn't be entitled too because my income would be above the threshold anyway, the 2.5% Medicare levy and the 2 year wait for the old age pension, they would be ahead by a mile.

 

At the end of the day, it is what it is, and we can all accept it and move forward or not accept it and let it eat at us, I know I have moved forward and cannot see myself ever returning to claim the OAP as the cost to sit there for 2 years Vs the years from the pension to recoupe the outlay and interruption to my lifestyle here, would mean it would take me 4 years to recoupe it, which would render me 72 years of age, suffice to say, I am a realist and cannot see myself living beyond that, and knowing my Mrs would get my pension when I croak, isn't worth the hassle. 

 

[Nakrob]

That would be me, that said, I had no choice but too declare myself a non resident based on my extensive research and what my accountant advised me, that is I was relocating to Thailand, with kids and all, cut and dry, and no way around claiming to be an Australian Resident.
 
If I had the choice to remain an Australian Resident for tax purposes, that would have been great, i.e. I could have hung onto my principal place of residence, I would have a tax free threshold of $18,200 as would my wife as she is an Australian Citizen, after both thresholds we would pay tax under the Australian tax system, we would be entitled to family A benefits as we have kids under 16 years of age, we would be entitled to Medicare, be enrolled in the electoral role so as to be able to put our votes forward come election times, local and federal, and of course not have to do the 2 year jail term for the OAP. I would also have my principal place of residence, whereby it would have been rented and the rent would have been added to my income from the ASX, naturally I would have to pay a % of the 50% future capital gains tax payable when I sold it, based on my yearly income, but the way they go about it in their legislation means they got my middle finger from the sale as it was a tax free sale, i.e. principal place of residence, and receive nothing in tax from me, except for the financial year 2016-2017 as mentioned before I made some money contracting for some clients, and that tax will be equal to what Stevemercer said he will lose as a foreign resident, again, I don't write up the rules, just follow them, and if Stevemercer is reading this, I know 1st hand what it is like to be less fortunate, right up till I turned 55 when I cashed in what I worked for all of my life, no hand outs, no inheritances, no lotteries, just worked my rear off from 14 to 55 and made a couple of right decisions as most people do, because a salary/wage is money to survive on, a 2nd job is for investing that money for a rainy day, but most people don't want a 2nd job and end up living off the OAP alone and 36% of OAP in Australia are living under the poverty line, the ones that are here are just making it last better, depending on the exchange rate, which isn't any good at the moment.
 
Having said the above, I was quite angry to have to sell my principal place of residence, but when I accepted the inevitable, i.e. having to declare myself as a non resident, it appealed to me to invest in the ASX so as not to pay any tax, i.e. they take away a hell of a lot of my presumed rights, so I pay no tax, this is all there legal doing, and for the life of me, I still cannot work out what benefit the Australian government gets from this, i.e. when I weigh up what I make per annum and pay no tax, and then weigh it up if I was to pay tax under the Australian taxation system, also taking into consideration family A benefits which I wouldn't be entitled too because my income would be above the threshold anyway, the 2.5% Medicare levy and the 2 year wait for the old age pension, they would be ahead by a mile.
 
At the end of the day, it is what it is, and we can all accept it and move forward or not accept it and let it eat at us, I know I have moved forward and cannot see myself ever returning to claim the OAP as the cost to sit there for 2 years Vs the years from the pension to recoupe the outlay and interruption to my lifestyle here, would mean it would take me 4 years to recoupe it, which would render me 72 years of age, suffice to say, I am a realist and cannot see myself living beyond that, and knowing my Mrs would get my pension when I croak, isn't worth the hassle. 
 

You can retain your property for up to 6 years as your principal place of residence even if you are not living in it and are non resident. After 6 years of income generation you will then pay CGT on the pro rata of time over six years based on the gain in value from when the property first started earning income.

[4MyEgo]

1 hour ago, Nakrob said:

You can retain your property for up to 6 years as your principal place of residence even if you are not living in it and are non resident. After 6 years of income generation you will then pay CGT on the pro rata of time over six years based on the gain in value from when the property first started earning income.

Thanks am aware of the 6 year rule, which looks like its being scrapped from 1 July 2019, nevertheless it applies to Australian Residents, not Foreign Residents 

[Bikeman93]

On ‎3‎/‎4‎/‎2018 at 6:31 PM, 4MyEgo said:

Are / were you an Australian resident for tax purposes immediately before leaving Australia? *

 

Yes X

No

By the wording this means once you are a non resident you remain a non resident the next year. Or am I wrong.

[Nakrob]

By the wording this means once you are a non resident you remain a non resident the next year. Or am I wrong.

I don't think so. You will remain non resident until you would meet the requirements for being a resident again.

[Bikeman93]

One of the requirements is you must be a resident immediately before leaving aust.

 

So that would mean you don't get the tax threshold for the first year you return to aust either.

[Nakrob]

One of the requirements is you must be a resident immediately before leaving aust.
 
So that would mean you don't get the tax threshold for the first year you return to aust either.

I don't think this is correct. If you return to Aus and would be classified as a tax resident again then you are taxed as such and have the tax free threshold applied pro rata depending on how far through the tax year you arrive back.

[4MyEgo]

16 hours ago, Bikeman93 said:

By the wording this means once you are a non resident you remain a non resident the next year. Or am I wrong.

If I understand your question correctly, you remain a non resident for tax purposes for as long as you are away from Australia, i.e. until you return to take up your Australian residency again, now how long does that it take to get you residency again, well I suppose as soon as you sign up a lease agreement, get electricity in your name, reapply for you Medicare card of which they will require a copy of both your lease agreement and electricity agreement/bill.

 

Remember one thing, as soon as your out of the country for more than 183 days you are a non resident, unless you prove otherwise, and if you do not prove otherwise, the date is retrospective if you own property, i.e. on the date you left the country.

 

Another point to remember, residency is within the financial year period.

[4MyEgo]

15 hours ago, Bikeman93 said:

One of the requirements is you must be a resident immediately before leaving aust.

 

So that would mean you don't get the tax threshold for the first year you return to aust either.

https://www.ato.gov.au/Individuals/Ind/Tax-free-threshold-if-you-are-leaving-Australia-with-the-intention-to-reside-overseas/

[ELVIS123456]

On 3/3/2018 at 4:43 PM, 4MyEgo said:

I don't know if you have read this one yet, but sending the link for you anyways.

 

23 to 26 is interesting: 

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

Just catching up after being absent a while.

 

23 to 26 is very interesting indeed and something that all Expats living overseas should keep in mind.  Many reasons, but number one is that if you make any money in Australia, if you are a non-resident you pay tax from dollar one  - no tax free threshold. Which means if you dont tell them, and they catch up with you, they can back date due taxes for many years.

[4MyEgo]

2 hours ago, ELVIS123456 said:

Just catching up after being absent a while.

 

23 to 26 is very interesting indeed and something that all Expats living overseas should keep in mind.  Many reasons, but number one is that if you make any money in Australia, if you are a non-resident you pay tax from dollar one  - no tax free threshold. Which means if you dont tell them, and they catch up with you, they can back date due taxes for many years.

You forgot the heavy fines, which you would have Buckley's contesting in a court of law, just ask Hogan, who is telling the truth Hogan, or the ATO, its up to you to decide.

 

I reckon the ATO got what it wanted, i.e. taxes back paid, fines and interest, everybody has a settlement point before the matter goes to court, they could have chosen to spent more tax payer dollars, or settle, and knowing Hogan is nearing his end in years, i.e. he is 78 years of age, they decided to settle.

 

Hogan probably did pay tens of millions of dollars, and is too proud to admit it, but not anywhere near 150 million as he isn't that rich, i.e. after his divorce to Linda and paying the ATO, he is reported to be worth $20 million and at 78 years of age, he should enjoy as much of it as he can in his remaining years, as he is left with some spare change from the ATO.

 

http://www.news.com.au/entertainment/paul-hogan-paid-tens-of-millions-to-settle-his-battle-with-the-australian-tax-office/news-story/f7152781f71072f859bc161ffeb1872a

 

 

[ELVIS123456]

1 hour ago, 4MyEgo said:

You forgot the heavy fines, which you would have Buckley's contesting in a court of law, just ask Hogan, who is telling the truth Hogan, or the ATO, its up to you to decide.

 

I reckon the ATO got what it wanted, i.e. taxes back paid, fines and interest, everybody has a settlement point before the matter goes to court, they could have chosen to spent more tax payer dollars, or settle, and knowing Hogan is nearing his end in years, i.e. he is 78 years of age, they decided to settle.

 

Hogan probably did pay tens of millions of dollars, and is too proud to admit it, but not anywhere near 150 million as he isn't that rich, i.e. after his divorce to Linda and paying the ATO, he is reported to be worth $20 million and at 78 years of age, he should enjoy as much of it as he can in his remaining years, as he is left with some spare change from the ATO.

 

http://www.news.com.au/entertainment/paul-hogan-paid-tens-of-millions-to-settle-his-battle-with-the-australian-tax-office/news-story/f7152781f71072f859bc161ffeb1872a

 

Good point.  But they probably would not be so severe on someone who has way less money, and who pleads ignorance - more likely to settle for back taxes and some interest and small fines.  But it is still the best course to be doing the right thing - and ignorance is no defence.  I read a story on the ATO some years ago about a bloke who had over accumulated about $60K in back taxes and was forced to leave Thailand and return to Australia, until he had paid off the debt from his savings and OAP.  He had rented out his flat while in Thailand for many years, and he didnt declare any income to the ATO or Centrlink.

 

Which reminds me of something - it is amazing how much Clink/ATO get given information on people from those they have annoyed/angered. They dont have investigators trolling through people's records (only the very rich like Hogan).  Individual investigations come from when they 'target' specific groups of people (plumbers), or a randomly selected audit, or as a result of being given information on someone (either from public or another Government organisation).  Most dont get caught because they did something wrong, they get caught because they annoyed someone, or became noticed by a Govt organisation, or were just plain unlucky and were randomly audited.

[Will27]

1 hour ago, ELVIS123456 said:

Good point.  But they probably would not be so severe on someone who has way less money, and who pleads ignorance - more likely to settle for back taxes and some interest and small fines.  But it is still the best course to be doing the right thing - and ignorance is no defence.  I read a story on the ATO some years ago about a bloke who had over accumulated about $60K in back taxes and was forced to leave Thailand and return to Australia, until he had paid off the debt from his savings and OAP.  He had rented out his flat while in Thailand for many years, and he didnt declare any income to the ATO or Centrlink.

 

Which reminds me of something - it is amazing how much Clink/ATO get given information on people from those they have annoyed/angered. They dont have investigators trolling through people's records (only the very rich like Hogan).  Individual investigations come from when they 'target' specific groups of people (plumbers), or a randomly selected audit, or as a result of being given information on someone (either from public or another Government organisation).  Most dont get caught because they did something wrong, they get caught because they annoyed someone, or became noticed by a Govt organisation, or were just plain unlucky and were randomly audited.

I agree with you that the average Joe would only be liable for back taxes and interest in most cases.

There is a difference between being "ignorant" and tax evasion where the penalties are much higher.

Cannot see the ATO taking the average pensioner to court.

 

I would be interested to hear more about the where the person was forced to leave Thailand. That doesn't sound correct to me.

I wonder what would stop someone with little assets to just claim bankruptcy and have the debt written off.

 

Yep, the ATO usually target certain occupations each year and also do audits on tax levels, plus random audits.

 

IMO the majority of people who get caught are from the dob-in lines that both Centrelink and the ATO have.

Most people talk about things and people get annoyed, jealous or whatever and dob them in.

[ELVIS123456]

I remember his name was Graham and he was given as an example on the ATO web site somewhere - deep inside its regulations and laws sections - I remember it took a long time and I stumbled across it.

 

I believe the main reason he had to come back, was to face the charges being laid against him - or be arrested in Thailand I guess.  I assume he had ignored their letters and/or calls - or never got them.  Plus he probably decided to live in the unit while paying off the debt.  And I believe that you cannot declare yourself bankrupt from overseas - maybe and maybe not.  Whatever the reason/s - he came back and he paid off the debt (slowly).