Tax return during first year of arriving

[Cots]

Hello

Does anyone know, when completing a tax return, where you account for your Uk earnings if you arrived part way through the tax year?

Is it classed as a foreign income of sorts? Are we double taxed on it? Can anyone advise? Thank you  

 

 

[Marisawright]

As I understand it, you were not legally resident in Australia until the date you arrived, so any income prior to that date is not taxable.  So you don't even have to mention it.   Likewise when you do your UK tax return, you only count your income up until the day you left. 

[Ken]

Your first tax return is a part-year tax return. You answer "yes" to "Did you become a resident for tax purposes during the year?" and enter your Australian Residency Start Date. Only income from that date onwards is entered (unless you had some untaxed Australian sourced income earlier in the year).

If you are a temporary resident then foreign income doesn't need to be included at all.

Edited October 17, 2021 by Ken

[Alan Collett]

Income from 1 July in the tax year of your arrival in Australia to the date before you became a tax resident of Australia and subject to Aus tax on your worldwide income should be included in the target foreign income section of your first Australian tax return.

Best regards.

[talktosi]

5 hours ago, Alan Collett said:

Income from 1 July in the tax year of your arrival in Australia to the date before you became a tax resident of Australia and subject to Aus tax on your worldwide income should be included in the target foreign income section of your first Australian tax return.

Best regards.

 

[talktosi]

These answers seem conflicting - ie the first 2 say only liable from when you arrive, whereas the last one says you could be liable for up to 8 months( ie if you arrived before end of March and therefore liable back to the previous July) Which is it ? 

[Alan Collett]

10 hours ago, talktosi said:

These answers seem conflicting - ie the first 2 say only liable from when you arrive, whereas the last one says you could be liable for up to 8 months( ie if you arrived before end of March and therefore liable back to the previous July) Which is it ? 

Where did I say that target foreign income is taxable?

It isn't!

There is no conflict in the answers!

Best regards.

[Marisawright]

Just now, Alan Collett said:

Where did I say that target foreign income is taxable?

It isn't!

There is no conflict in the answers!

There is a conflict because you say that your income BEFORE you arrive in Australia must be declared, even though you won't be taxed on it, whereas Ken says you just ignore it.  I remember having the same question when I moved countries and being given the "just ignore it" advice, too.

[Alan Collett]

Just now, Marisawright said:

There is a conflict because you say that your income BEFORE you arrive in Australia must be declared, even though you won't be taxed on it, whereas Ken says you just ignore it.  I remember having the same question when I moved countries and being given the "just ignore it" advice, too.

Fair comment.

We've made enquiry of the ATO regarding this question.  

My comment above is in the light of the response from the ATO.

See also here: https://guides.dss.gov.au/guide-social-security-law/3/9/3/36

Types of applicants with target foreign income

There are numerous types of applicants who may have target foreign income.

Examples: Applicants who have target foreign income may include:

<snip>

• newly arrived migrants who received foreign income in the reference tax year that is not subject to tax in Australia,

Hope this helps.

Best regards.

[Ken]

2 hours ago, Marisawright said:

There is a conflict because you say that your income BEFORE you arrive in Australia must be declared, even though you won't be taxed on it, whereas Ken says you just ignore it.  I remember having the same question when I moved countries and being given the "just ignore it" advice, too.

Sorry for the confusion Marisawright. I was referring to it as being ignored for tax purposes. It should be filled in at income test IT4 however as it forms part of your "Adjusted Taxable Income" used by Services Australia (Centrelink) to determine entitlements to certain benefits. Note that if you do claim anything from Services Australia they will still ask you to declare amounts of Target Foreign Income on their forms.