Income tax in the year you move to Australia

[Jon the Hat]

HI All

Hopefully quick question; I know that in Australia once you are a tax resident you pay income tax on your worldwide income (subject to double taxation relief), however I am interested in what happens in the year you move.  In the UK your tax free allowance applies for the tax year even if you only work in the UK for say 6 months if it and cease to be tax resident;  fill in a form and you get a ta rebate.  I am trying to work our if that is actually cash benefit for me, or whether I end up paying tax on that income in austalia anyway (possibly at a lower rate).

Say I work in the UK from 1st April to 30th August, then move to Australia in early September.  As I am not resident in Australia when I earned that income, do I have to declare that income on my Australian tax return and then pay tax on that in Australia (subecjt to double taxation treaty) ?

On a second point, If was then paid a bonus on the 25th September once I had arrived in Austalia but before I started to work, would I be deemed resident from the day I arrived and hence have to pay tax on that or not?

Thanks in advance!

Jon

[Marisawright]

It’s the same for all countries  - you are liable for income tax in your home country on all your income, regardless of where it is earned. 

However you’re liable only when you’re legally resident. If you’re only legally resident for part of the tax year then you only declare the income for that part of the tax year.

I think the bonus would be taxable in Australia 

Edited December 15, 2019 by Marisawright

[Alan Collett]

3 hours ago, Marisawright said:

It’s the same for all countries  - you are liable for income tax in your home country on all your income, regardless of where it is earned. 

However you’re liable only when you’re legally resident. If you’re only legally resident for part of the tax year then you only declare the income for that part of the tax year.

I think the bonus would be taxable in Australia 

Income in the year of arrival to live in Australia from 1 July to the day before you become a tax resident is disclosable on the Tax Return for the year of arrival as Target Foreign Income.

Note there is a difference between disclosable and taxable - TFI is not taxable.    It can though affect the entitlement to social security benefits.

Best regards.

[Jon the Hat]

Thanks both, that is helpful.

[uzair4100]

I use this Pay Calculator to get an estimate of tax I have to pay.