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Oz Tax Returns

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Hi

 

It that time of the year!

 

 

Situation - we migrated to oz from the UK 6 months ago, hence have both UK and Oz income for this tax year, and will continue to receive interest income from the UK.

 

Questions - I believe we need to declare our UK earnings on our tax returns, However these have been taxed in the UK. Will we have to pay tax on these in Oz? Do we need to see an accountant for our returns? I made to understand that there are numerous tax offsets eg : internet, school uniforms that we can claim back , is that correct?How is interest income on joint accounts in oz worked out for tax purposes?

 

 

Any advice / suggestion are more then welcome.

 

Cheers

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Guest ZejAK

First thing - the eTax self service application prepared by the ATO is pretty intuitive and self explanatory. It's very easy to use and you basically follow your nose.

UK earnings - I'm pretty sure that you need to complete a UK tax return and get the paperwork from the IR.

When you complete your Oz return the O/S earnings section has a field for OS tax paid - this is then used as a credit so you are not paying tax twice.

If you are still unsure - have a chat with an accountant, but from what I rememebr the eTax self service applications covers overseas earngins and tax paid.

As far as the other 'offsets' you can pretty much claim anything that helps you to earn an income. So if you need a laptop in order to make money - you can claim it. There is a 'work expenses/claims' section in the tax return where you list your offsets and what they are. If you have an item (like a mobile phone) which you may use 80% personal and 20% for income generating activities, you can only claim 20% of the bills - or if you have an itemised bill you can claim the calls directly relating to work.

There are a lot of things that you can claim and different ways to do it. I would say that if you are unsure - have a chat to an accountant - at least for the first year. Once you are clear on what you can claim and how you'll be able to lodge your own returns.

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Guest Guest31881

as ZejAK, said the online tax return is very easy to follow, Last year was my first year and I had paid UK tax, i filled the online tax return in and when I had a problem about where to put the "UK Tax Paid" I phoned the info line and they went through it with me, made it easy. as stated my UK tax paid was treated as an allowance against Australian tax due. You only pay tax once, either in Australia or in the UK.

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Hi

 

It that time of the year!

 

 

Situation - we migrated to oz from the UK 6 months ago, hence have both UK and Oz income for this tax year, and will continue to receive interest income from the UK.

 

Questions - I believe we need to declare our UK earnings on our tax returns, However these have been taxed in the UK. Will we have to pay tax on these in Oz? Do we need to see an accountant for our returns? I made to understand that there are numerous tax offsets eg : internet, school uniforms that we can claim back , is that correct?How is interest income on joint accounts in oz worked out for tax purposes?

 

 

Any advice / suggestion are more then welcome.

 

Cheers

Tell me anyone, the cost os using a tax accountant is, initself tax deductable so why do lots of folk talk about doing their own online etc? seems a no brainer if this is correct?

:confused:

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Guest Guest31881
Tell me anyone, the cost os using a tax accountant is, initself tax deductable so why do lots of folk talk about doing their own online etc? seems a no brainer if this is correct?

:confused:

 

 

If the Accountant charges you $300, then that is offset against your tax, But it means you do not pay tax on that $300, not that you get all $300 back. It costs you to use an accountant and as the on line system is very easy why pay for accountant unless you need one.

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hi, I'm just doing my take return also and have the same question. I worked until mid August in the UK last year then moved to Australia in October for the first time to become resident. Do the ATO need to know about my work in the UK even before I became an Australian resident?

 

I understand you can offset the tax already paid in the UK, but in the case that more tax is required by the ATO, why would I have to pay Australian tax on my UK earnings when living in the UK before even coming to Australia? It doesn't make sense and the question on the tax return does not distinguish between living in Australia and working abroad for some time or living and working abroad before coming to Australia.

 

Later on in the tax return, where it asks about your spouse, the question specifically asks "what date was your spouse resident in Australia for tax purposes", but it doesn't ask this question of the main applicant (me). When I was living and working in the UK, I was not a resident of Australia for tax purposes, so why would my income be considered for tax?

 

Thanks for your help.


READ FIRST: please note that my posts are my own personal opinions based on my experiences. These are MY OPINIONS pure and simple, NOT a statement of fact.

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Guest Guest31881
hi, I'm just doing my take return also and have the same question. I worked until mid August in the UK last year then moved to Australia in October for the first time to become resident. Do the ATO need to know about my work in the UK even before I became an Australian resident?

 

I understand you can offset the tax already paid in the UK, but in the case that more tax is required by the ATO, why would I have to pay Australian tax on my UK earnings when living in the UK before even coming to Australia? It doesn't make sense and the question on the tax return does not distinguish between living in Australia and working abroad for some time or living and working abroad before coming to Australia.

 

Later on in the tax return, where it asks about your spouse, the question specifically asks "what date was your spouse resident in Australia for tax purposes", but it doesn't ask this question of the main applicant (me). When I was living and working in the UK, I was not a resident of Australia for tax purposes, so why would my income be considered for tax?

 

Thanks for your help.

 

they are only interested in what you have earned since becoming a resident for tax purposes.

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I also moved here halfway through the tax year last year, we had a ten minute consultancy with a tax accountant who basically said that I only had to declare earnings since I'd been in Australia.

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I also moved here halfway through the tax year last year, we had a ten minute consultancy with a tax accountant who basically said that I only had to declare earnings since I'd been in Australia.

 

Not to sure about that . Because the ATO (Australia Tax Office ) has clearly said that foreign earnings and tax paid on these earnings have to be declared in AUD (Conversion rates are available on the ATO website.

 

Another question - when declaring tax paid on UK earnings should we include NI deductions?

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Subsequent to my last post I called the ATO again for further clarification.

 

Spoke to a gentleman who explained everything and said that you only need to declare foreign income earned after becoming a resident in Australia not other incomes earned prior to arriving in Australia. (Apologies to RockDr)

 

Hence if one is earning interest, rent, etc overseas but living in oz these will have to be declared and converted at exchange rates available on the ATO website.

 

He also said that the tax free allowance would be prorata for the period you have been in oz.

 

Cheers

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Thanks for that Colin, mind you i'm clueless when it comes to tax. You seem switched on so if I may ask you a quick question;

I have the proceeds from our house sale sitting in Barclays bank and with the rate of exchange I have seen it plummet in value (coming up to two years now).

Q, do I have to declare the interest earned on this money? on my Australian tax return? I intend to leave the money sitting there until it recovers somewhat (maybe another year or even more!!).

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Guest GeorgeD
Q, do I have to declare the interest earned on this money? on my Australian tax return? I intend to leave the money sitting there until it recovers somewhat (maybe another year or even more!!).

 

Yes you do need to declare it. It might as well be sitting in an Australian bank account from that perspective, the fact it is overseas makes no difference, and the fact the capital came from a house sale makes no difference...the interest is an income, so has to be declared.

 

Interestingly...strictly speaking, you also have a tax liability on any exchange rate gains you make between the rate when you sold the house (if you were an Australian Tax Payer) and when you transfer the money to Oz (although, there is no tax on the actual transfer itself)...so if you made a profit of 100,000 GBP on your house sale two years ago and the Exchange rate was $1.80 to 1 GBP, you could've converted that to $180,000...if the rate improves and you finally transfer at a rate of $1.90 to 1 GBP giving you $190,000, then you have a tax liability on the $10,000 you have "earned". Not so much an issue right now if the rate is well below when you sold, but another obscure stealth tax to know about...

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Yes you do need to declare it. It might as well be sitting in an Australian bank account from that perspective, the fact it is overseas makes no difference, and the fact the capital came from a house sale makes no difference...the interest is an income, so has to be declared.

 

Thanks George, my dilema now of course is to see if I can get the interest earned information from Barclays! notorious for being slow and unforthcoming.

One to note though is that I notice when viewing my account online that a portion of the interest earned is taken off as tax? therefore does that negate my need to declare it as it seems I'm paying tax to the UK taxman?

Cheers

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Thanks George, my dilema now of course is to see if I can get the interest earned information from Barclays! notorious for being slow and unforthcoming.

One to note though is that I notice when viewing my account online that a portion of the interest earned is taken off as tax? therefore does that negate my need to declare it as it seems I'm paying tax to the UK taxman?

Cheers

 

No it doesn't negate your need to declare it, it's still a legal requirement to do so, but you will also declare the amount of tax paid to the UK taxman which may mean there is no further tax to pay and in any case less tax to pay.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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I just entered mine into e-tax, and even though I paid 20% tax on my UK interest, the Oz taxman charged me about another 20% according to the estimate.

 

With regards to the exchange rate, it was 1.9AUD/GBP when I got the money, but now is 1.5, so can I claim a loss?!! I'm guessing not, but I've transfered about 30kGBP to Oz at a lower exchange rate. If I would be taxed if the exchange rate was better, then it stand to reason I could enter the worse exchange rate as a loss. Also, my UK money is getting 3% interest, but could be getting 6.5% in Oz, is this a loss too?


READ FIRST: please note that my posts are my own personal opinions based on my experiences. These are MY OPINIONS pure and simple, NOT a statement of fact.

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