How to distinguish an Aussie non-resident from a resident for tax purposes
Australian property tax and expatriate tax expert STEVE DOUGLAS gives guidelines to differentiate an Aussie non-resident from a resident for tax purposes.
Q My family lives in Australia while I work overseas. Does this mean I’ll be taxed in Australia?
A In the 2009 Australian Federal Budget, the Rudd Government announced rule changes for Australians working abroad – if they are residents for tax purposes. If you’re genuinely living overseas these changes don’t apply to you and tax is not payable in Australia on offshore income, as long as you establish non-resident status.
If one spouse lives overseas and the other in Australia, this can cause confusion when establishing your tax position. Living apart doesn’t affect your tax status, but it does mean closer scrutiny to ensure you’re actually living overseas, rather than working abroad.
Consider the following to determine whether you’re a non-resident or resident for tax purposes:
Situation
Non-resident outcome
Longevity.
Your intention to live and work abroad for the indefinite future should be clear and your actions should support this – perhaps you might have plans for your spouse to join you at a later date.
If you have any doubts as to what type of resident you are, seek professional assistance immediately. Australia allows a full tax credit for any tax paid abroad and there are other tax planning techniques which can help, so don’t be afraid to confirm your status.
We must be sure about what type of resident we are for purposes of tax otherwise really a lot of confusion and problem can arise.You have really drag my attention to an important point.
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