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Bikeman93

Tax changes for expats

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Where did you hear, read or see that?
 
I doubt the ATO is going to ask to see your passport to determine
your residence status.
 
Sorry, but I can't see this being correct at all.
I understood that part of the assessment of whether you remain a tax resident in Australia once you 'leave' is how permanent a move you make i.e. if you take family with you and purchase property in your new home country. I could see a scenario where you are transient in a number of countries, having left Australia, to the extent that you're still considered tax resident in Australia. This is just my thoughts not fact.

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3 hours ago, Bikeman93 said:

I guess that depends on how much honesty you want to provide.

 

For example: Are you an Australian resident who is emigrating to live permanently in another country?

For most people living in Thailand, that would mean yes. Tick yes and you're a non-resident.

 

Again, the vast majority of the Aussies living in Thailand would be classed as non-residents IMO.

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I'm a bit surprised by the above tool. I'm a retired Australian Public Servant, and on the CSS super scheme. According to the tool I am always an Australian resident for tax purposes no matter no long I live overseas!

 

 

 

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On 16/02/2018 at 2:22 PM, gearbox said:

Lots of useful info in the thread.

 

The data matching capabilities and the information exchange between the govt departments is not perfect yet, but is getting better and better. 

 

Did anyone try to move all of their assets to a tax friendly country like Singapore? AFAIK the tax is very low there on income from shares and capital gains, but seems to be difficult to open a bank account without employment pass.

A wealthy mate of mine said he opened up a trust in Singapore

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On 28/02/2018 at 8:23 PM, Bikeman93 said:

Apparently you can stay out of the country and still retain tax residence as long as you don't spend most of that time in any 1 country. Meaning visiting 3 countries with no single 1 more than 183 days.

 

To simplify they class you as a non resident only when you live in any one country more than 183 days.

 

Makes the Elite or Retirement Visa less attractive.

Scroll down to 26 then back to 23 this is the best guide for those seeking to retain their residency status, and I say, good luck, best read as this sums it up.

 

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

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On 19/02/2018 at 4:12 AM, ELVIS123456 said:

The statement above "The rules are pretty clear, i.e. if you are out of the country for more than 183 days in any "financial year" you are a non resident, unless you can prove otherwise...."  is correct in some, but not in all situations.  This is the wording from the relevant ATO site:

 

The primary test of tax residency is called the 'resides test'. If you reside in Australia, you are considered an Australian resident for tax purposes and don't need to apply any of the other residency tests.

If you don't satisfy the resides test, you'll still be considered an Australian resident if you satisfy one of three statutory tests:

  • The domicile test: You're an Australian resident if your domicile (broadly, the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside Australia.
  • The 183-day test: If you're actually present in Australia for more than half the income year, whether continuously or with breaks, you may be said to have a constructive residence in Australia, unless it can be established that your usual place of abode is outside Australia and you have no intention of taking up residence here.
  • The superannuation test: This test ensures that Australian government employees working at Australian posts overseas are treated as Australian residents.

Who this section is meant to advise is the people who 'want' to be a non-resident for tax purposes.  If you are not a 'resident', then you can still be a resident for tax IF you satisfy one of the three tests - including being in Aust for net 183 or more days in any year - "unless your usual place of abode is outside Australia and you have no intention of taking up residence here."  This section is for people who are not resident in Aust and do not want to be a tax resident - if you are not in Aust for net 183 or more days then you are definitely a non-resident for tax.

 

You can be outside Aust for up to 2 years at a time, and still be considered a tax resident. After 2 years absence it becomes more problematic, but it is still possible to remain a resident for tax.  

 

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/Residency-tests/

 

In my plans, I wish to remain a resident for tax purposes for many reasons, and being able to return for any serious medical issues using Medicare is just one of them.  Being a tax resident (and liable for the medicare levy if applicable) greatly assists in my plans. 

 

Hopefully 'they' wont close the loophole that allows non-residents to gain tax advantages through the use of franked dividend shares, for those undertaking that course of action, but it would be wise to have a Plan B if they do take that route. Likewise, those of us with other plans need Plan Bs and Cs if they decide to stop expats receiving the OAP when overseas and stop them getting Medicare immediately when they return.  

 

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

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On 28/02/2018 at 8:58 PM, Will27 said:

Where did you hear, read or see that?

 

I doubt the ATO is going to ask to see your passport to determine

your residence status.

 

Sorry, but I can't see this being correct at all.

I believe if you scroll down to 26 you can work out what they are saying, then back to 23.

 

This has a hell of a lot of interesting stuff in there for guys like us as knowledge is power.

 

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

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On 28/02/2018 at 9:22 PM, Nakrob said:
On 28/02/2018 at 8:58 PM, Will27 said:
Where did you hear, read or see that?
 
I doubt the ATO is going to ask to see your passport to determine
your residence status.
 
Sorry, but I can't see this being correct at all.

I understood that part of the assessment of whether you remain a tax resident in Australia once you 'leave' is how permanent a move you make i.e. if you take family with you and purchase property in your new home country. I could see a scenario where you are transient in a number of countries, having left Australia, to the extent that you're still considered tax resident in Australia. This is just my thoughts not fact.

Scroll down to 26 then back to 23, this should clarify a few issues:

 

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

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24 minutes ago, Stevemercer said:

I'm a bit surprised by the above tool. I'm a retired Australian Public Servant, and on the CSS super scheme. According to the tool I am always an Australian resident for tax purposes no matter no long I live overseas!

 

 

 

I don't know much about Australian Public Service and the CSS, but I know of a bloke who is paying tax as he is on the PSS, does that make any sense, I had a quick read on it, and I think it had to do with what year you took it or received it ? 

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36 minutes ago, Stevemercer said:

I'm a bit surprised by the above tool. I'm a retired Australian Public Servant, and on the CSS super scheme. According to the tool I am always an Australian resident for tax purposes no matter no long I live overseas!

 

 

 

I don't think it's worded that well, but I'm pretty sure it means you have to be currently employed by the government.

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24 minutes ago, 4MyEgo said:

I believe if you scroll down to 26 you can work out what they are saying, then back to 23.

 

This has a hell of a lot of interesting stuff in there for guys like us as knowledge is power.

 

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

Thanks for that.

Clear as mud really and so many things can be taken into account.

 

 

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On 2/14/2018 at 9:27 PM, 4MyEgo said:

but you have been living in Thailand for more than 183 days,

Is that within a calendar year or financial year?

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21 minutes ago, Straight8 said:

Is that within a calendar year or financial year?

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

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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.

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

Where did you source the info in orange above?

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