Non Domicile Oz Tax liability

[namron1]

Query on Aus Tax Liability on Investments left in Aus if we return to live in the UK for a number of years. During that time we hope to work in the UK and will be tax payers in the UK. Due to the very low exchange rate of Aus$ to £ we will leave some of the money we receive from the sale of our property invested in Aus. As non domicile citizens what would be our Aus Tax liability if we lived in the UK for 3 full Aus Tax years

[MARYROSE02]

If you have an income in Australia you will have to submit a return to the ATO every year but you will not be taxed twice because there is a double taxation agreement between the UK and OZ. Get a tax agent/accountant to do your Aussie returns.

[Alan Collett]

If you have an income in Australia you will have to submit a return to the ATO every year but you will not be taxed twice because there is a double taxation agreement between the UK and OZ. Get a tax agent/accountant to do your Aussie returns.

 

 

Not correct - the need to lodge an Australian tax return and to declare Australian source income depends on the nature of the income arising in Australia.

 

For example, there is no requirement to include interest income from bank deposits in Australia if you are not resident in Australia and are tax resident in the UK.

 

Interest paid on a bank deposit in Australia to a tax resident of the UK is subject to a 10% withholding tax under the provisions of the UK-Australia Tax Treaty, and that 10% extinguishes the liability in Australia.

 

The interest is then likely to be properly assessable in the UK and should be declared on the Foreign Income supplement to a UK Self Assessment tax return.

 

To be contrasted with rental income from Australian located property, which remains fully taxable in Australia.

 

Best regards.

[Marisawright]

Alan's the expert! The way I understand it, if your money is in an Australian bank, then the bank will deduct tax at source and you don't need to do anything.

 

If the money is sitting in superannuation, then you also don't need to do anything.

 

However if you are investing in shares or a managed fund, that would be a different story.

[Ken]

Alan's the expert! The way I understand it, if your money is in an Australian bank, then the bank will deduct tax at source and you don't need to do anything.

 

If the money is sitting in superannuation, then you also don't need to do anything.

 

However if you are investing in shares or a managed fund, that would be a different story.

 

Not quite right. Share dividends are also subject to withholding tax for foreign investors (which includes Australian citizens residing overseas). As for a managed fund, all I can say is - it depends!

[Marisawright]

Not quite right. Share dividends are also subject to withholding tax for foreign investors (which includes Australian citizens residing overseas). As for a managed fund, all I can say is - it depends!

 

I wasn't sure about share dividends so thanks for that. I had a feeling managed funds might be a thorny area!

[Sustain]

Not quite right. Share dividends are also subject to withholding tax for foreign investors (which includes Australian citizens residing overseas). As for a managed fund, all I can say is - it depends!

 

I thought foreign investors received dividends gross or in other words with out franking credits?

 

Here in Singapore dividend income is tax free

[Ken]

I thought foreign investors received dividends gross or in other words with out franking credits?

 

Here in Singapore dividend income is tax free

 

No. But thanks for raising the distinction between withholding tax and franked dividends for me. Foreign investors have withholding tax deducted from any unfranked dividends they receive. If the dividends are franked then they can't take advantage of the franking credit but they don't have to pay withholding tax as well.