When it comes to managing your personal finances as an Australian expat, wherever you may be or are considering moving to in the world, it’s important to build your dream team. A key-person or field on that dream team should be your Australian accountant, who has a solid understanding of tax matters impacting Australian expats, which can be more complicated than you may assume.
Tax matters are common questions that our team at Ally Wealth are asked on a regular basis, and seem to be what causes anxiety and stress amongst Aussie expats, so it’s important that you’re aware of your obligations, and you’re not missing out on opportunities that may be available to you.
When it comes to managing your new tax obligations as an Australian expat, it’s important to consider and be aware of four key aspects:
- What your new tax obligations are in your country of residence;
- What your tax obligations are in Australia as a non-resident for tax purposes;
- How the Double Tax Agreement (DTA) works between Australia and your country of residence if there is one;
- How these obligations could change should you return to Australia or relocate elsewhere.
This week our team at Ally Wealth Management is outlining the key questions that you should be asking your prospective accountant before proceeding to formally engage them.
For many Australian expats that relocate overseas, they continue to use the services of their local accountant that they’ve used for years before they already have their documentation on file, and it makes life easier. There may also be a strong relationship there and you may even consider them a friend. However, it’s important to ensure that they genuinely understand your obligations and opportunities as an Australian expat.
Over the years, we’ve seen many Australian expats miss out on opportunities such as voluntary superannuation contributions to offset tax on rental income, missed deadlines to sell Taxable Australian Property, and even some filing tax returns in Australia as a tax resident of the country when in fact they were a non-resident. How can you ensure that you have the right fit when it comes to your tax accountant to ensure that you’re doing the right thing.
Let’s explore the questions to ask your prospective accountant
- What percentage of your client base approximately are Australian expats?
If you’re going to be the only one, or they don’t work with too many Australian expats across the globe, then chances are they’re going to have limited time to keep up to date with the important changes that Australian expats need to be aware of and may not be fully across the current expat tax landscape.
- Can you tell me about some of the recent changes impacting Australian expats?
There have been some quite significant changes over recent years impacting Australian expats, from the removal of the Main Residence Exemption for non-residents of Australia to the proposed Tax Residency changes announced recently, which if the accountant is not aware of and how it impacts Australian expats, then chances are you’ll want to move on swiftly to another option.
- Are you familiar with how different assets are taxed for non-residents of Australia for tax purposes?
Different asset classes such as Australian residential or commercial property is treated as Taxable Australian Property, while shares for example purposes by non-residents of Australia are not. It’s important to ensure that they’re aware of both the Capital Gains Tax (CGT) rates that apply for non-residents, and also withholding tax and how it applies to expats.
- How do you work with your expat clients to prepare to return to Australia?
For most Australian expats, at some stage, they will return to Australia to either continue working or retire or for some other purpose. There is a great deal to consider when it comes to repatriation to Australia and there are many tax implications of returning. Your accountant should be working with you anywhere up to 12 months prior to your return to ensure that an appropriate plan is in place to repatriate in a tax-efficient manner.
We hope that these questions help you in identifying the right accountant for you as an Australian expat, who can assist in building your dream team.
Our team at Ally Wealth works with a number of Australian accountants with a solid understanding of Australian expat tax matters, particularly on repatriation planning over the past 12 – 18 months. If you’re not quite sure where to start, or what tax advice you might require, reach out to our team for an obligation-free discussion here.
Ally Wealth Management is the trusted ally in finance for Australians at home and across the globe. As both Australian expats and residents, the founders of Ally have a unique understanding of the common personal financial challenges faced.
Book your complimentary appointment with our team at Ally Wealth Management to discuss how we can help you to achieve your financial goals.
Ally Wealth Management Pty Ltd is a Corporate Authorised Representative of Sentry Advice Pty Ltd ABN 77 103 642 888. Sentry Advice holds an Australian Financial Services Licence (AFSL) No. 227 748.
General Advice Warning: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.