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What tax planning measures should I take if I'm leaving Australia to live abroad?

I'm thinking of moving abroad, but I'm unsure what I need to do from a tax perspective in Australia - what tax planning do I need to undertake when moving abroad?

Watch: What tax planning measures should I take if I'm leaving Australia to live abroad?

What tax planning measures should I take if I'm leaving Australia to live abroad?

The first thing to understand is the tax system in the jurisdiction you will be working and living in. You will need to be clear on what this country will tax you on, and whether they will tax you on foreign income. For example, if you move to Hong Kong or Singapore, foreign income isn't taxed. Whereas, if you move to the UK and become resident there, they will tax you on worldwide income.  
 
The next tax planning point is to understand your Australian tax residency status. Your tax residency status in Australia will determine what Australia taxes you on, and it will have an impact on the capital gains tax you pay. You will also need to establish whether Australia has a double taxation agreement with the jurisdiction you are moving to and what the details of that agreement are.  
 
Tax planning also requires consideration of the types of assets you hold. For example, Australia does not allow non-residents to access the 50% capital gains tax concession. Therefore, it may not be a good idea for you to hold Australian property as an investment if you're a non-resident of Australia as, if you sell it, you would be required to pay full capital gains tax. By comparison, if you become non-resident and have chosen to invest in shares, these typically will not be subject to Australian capital gains tax when you sell them. 
 
A common question Australian expats have when they move abroad is, what happens to my Australian home? Many people who move abroad will rent out their Australian main residence, and there is a myriad of different nuances when it comes to capital gains tax, concessions and exemptions to do with main residence and former main residence properties. This is an area where you are certainly best seeking support from a tax planning expert.  

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Last updated: 18 November 2024 at 13:44