Returning expats facing tax implications
Australians returning home from overseas because of the COVID-19 pandemic will have to be careful to meet the tax implications in the country they left, according to HLB Mann Judd.
Expats retuning to Australia would need to account for income tax, any share holdings, employee share schemes, cash in offshore bank accounts and pension funds.
Another consideration would be property and capital gains tax applied when a property is sold. Some countries charged non-residents a higher rate of transaction tax or tax capital gains on profits from property investments and, in Australia, if a person had retained property while abroad, it could be a better option to move back first before selling.
Finally, pensions would need to be transferred back into the Australian superannuation system.
Peter Bembrick, HLB Mann Judd Sydney tax partner, said it was important for expats to seek financial advice, and even more important that they did so before they returned to Australia.
“Even if someone has been living and working abroad for a relatively short period of time, it can still result in a hefty tax bill on their return to Australia,” he said.
“The nature of COVID-19 also means some expats will have been laid off, so the circumstances dictating their return could be quite stressful. If they’ve got a sound financial strategy in place throughout their stint overseas, it could go a long way in alleviating a lot of the pressure.
“A strategy needs to be in place while an expat is still residing abroad. Waiting until such time that they’re scheduled to return will only result in added stress and potential tax exposure that could otherwise have been avoided”.
AUTHOR
Laura Dew
Recommended for you
The RBA has handed down its much-anticipated rate decision, following widespread expectations of a close call.
Two national advice businesses have merged to form a leading holistic advice business with $2.5 billion in funds under management.
Insignia Financial has completed its transition of a range of administration and technology functions to SS&C Technologies as it seeks to be a leading wealth manager by 2030.
ASIC has permanently banned a financial adviser after he allegedly concealed information from clients and misused client funds, among other breaches.
