tax allowances

[Alan Race]

Hi everyone,

I would be grateful for one final bit of information before setting off for sunny oz. I've read the Australian tax web site ( riviting stuff !! ) I'm 65 and my wife is 63, now my understanding is that because of our age we as a couple would be entitled to a tax free allowance of around $ 60,000 pa. total combined income before we have to pay tax. Can anyone confirm this as corrrect or otherwise. Sounds much more generous than here in the UK so have I got this right ?

Thanks and cheers Alan

[Liam]

Hi Alan

I am afraid it all depends on the sources of your income. For example all Australian Superannaution Pension payments after age 60 are now TAX FREE in Australia but UK Pensions received in Australia are taxed.

If your income is all "taxable" then for senior Australians (which you and your wife will qualify as) eligible for the senior Australians tax offset you will be able to earn more income without paying tax. Singles will be able to have taxable income up to $25,867 (up from $24,867) and couples up to $43,360 combined (up from $41,360).

There may be other factors surrounding your types of income that mean you are entiled to more or less than these limits but they are a good guide:

Some tax offsets are available that may reduce the amount of tax you have to pay, for example:
the senior Australians tax offset
the pensioner tax offset
the beneficiary tax offset
the low income tax offset
the private health insurance tax offset
the spouse tax offset, and
the franking tax offset.

The system here has really been slanted here to suit people over 60 who have placed some of their funds into superannaution as those funds will pay no tax on earnings or capital gains once in pension phase.

You could look at ideas such as placing funds into Super in your wife's name as she is still under 65 and starting a tax free income stream from these funds rather tan keeping these funds in the bank and paying tax.

Everyone's circumstances are different so you should seek specific personal advice on your own circumstances.

I hope you and your wife have a nice arrival and settle in fast. This is a lovely country for retirees in my honest opinon. Most of my clients are 60 plus and I envey 90% of their lifestyles (being only 38 I have a few years to go!). Those who have not planned for their retirement are the ones i feel sorry for and we do try and get the maximum state assistance.

I hope and expect that you and your wife will be in the 90%


Lifestyle in Oz:: Carton of beer $35...Sausages $9 .....BBQ on the lawn on an aussie spring evening with new friends...priceless!
oh yeah and a bottle of wine for the sheila's..$10
regards

Liam