Going overseas

This is the second of the Majenda Insights Series. My name’s Geoff Taylor and I’m a tax accountant and Australian financial planner. I’ve been looking after expats for the last 20 years. And I thought I’d make this series of videos just to provide some of the insights I’ve had over that time.

To start, this is general advice. I haven’t made enquiries into your personal circumstances, goals, needs, objectives, or any of those things. It’s not personalised to you. But if you do need that personal advice, I’m happy to connect and provide that advice in writing or verbally.

The topic of this video is ‘Going overseas’. Let’s say you’re a tax resident of Australia. Now you’re looking at becoming an expat. What do you need to be aware of? And you can easily go online and find quite a lot of material around what are the tax residency rules. You might also find there’s been a number of rulings. The latest ruling, TR 2023/1, is worth a look. But these rules are quite technical and you’ve got to look at what are your personal circumstances and under what circumstances you would cease to be a tax resident of Australia.

If you came for advice to me, I’m going to ask you a series of questions, which is going to include some of these things. First question will be which country are you going to? Because Australia has double tax treaties with about 45 countries. You might be entitled to tiebreaker relief. That might help with identifying when you cease to be a tax resident of Australia and whether you can benefit from the treaty. If you’re going to a non-treaty country, it’s a different ballgame. We need to know which country you’re going to. Are you an Australian citizen? Are you intending to maintain your Australian citizenship or are you going to emigrate to another country?

That might be a factor that gets taken into account as part of your residency analysis. How long are you actually going overseas? Is it just a holiday? Or are you going for work? Are you going for two years, three years, or for an indefinite period? All of these are factors that are taken into account. Are you working or are you studying or what are you actually doing? We’re interested in what are your personal circumstances?

Is your family going with you? Is your family going with you immediately upon leaving Australia? Or are they coming at a later date? Because that can be a factor as well. When do you intend to return to Australia? And under what circumstances do you intend to return? How often will you return for holidays and to see family? Or are you going to come back for significant periods of time? Will you be maintaining your Australian residence? Will you have a permanent residence in the other country? Then your assets, what are your assets?

Do you have assets in Australia? That is another factor taken into account. Whether that might be investment properties, your previous main residence, it might be superannuation. All of these things get taken into account when assessing whether someone is tax resident or not. Do you have a self-managed super fund? If you do and you’re intending to become non-resident for personal tax purposes, then you’ve got to look at the tax resident status of the SMSF and whether there’s any changes that are required there. Do you have business interests? Are you going to continue to conduct those businesses or that business while you’re overseas? You can actually go and look on the internet and probably find out the answer for yourself.

But then what happens in the outlier cases, for example, where there have been cases where an individual goes overseas and intends for his wife and family to follow him. And that’s obviously key to him becoming non-resident. But then they change their mind. What happens if you go on a three-year contract and then you lose your job or you get sick or you have to come back inside what was intended as a two or three-year stint overseas? These are the sort of things that you’ve got to be aware of. I often give advice around those situations where people have done an overseas stint.

What happens if I lose my job within two years and I come back? What do I do about that situation? Where I can help is providing tax advice, providing insights into what options you’ve got available. I do work with professionals in the US, the UK, Switzerland and other countries where we need advice on the domestic rules in those countries. The combination of my expertise plus the expertise of international tax professionals is the way we give the answer to the client.

If you’re at all concerned about your tax residence position and what you need to do to establish yourself as a non-resident, then I would be happy to talk to you. And please click on the link below and we can set up a Zoom meeting. I hope this has been informative and I look forward to seeing you soon.