If you are considering or have committed to moving overseas we can provide financial advice to ensure that your investments and superannuation are correctly setup so that you can make the most of your time whilst you are overseas. This will provide you with the peace of mind knowing that your financial affairs will continue to be handled in a professional manner.
Normally when you first entertain the idea of becoming an expat you will Google where to live, what the best schools are in the area and what it is like living in the city or country but unfortunately obtaining financial advice is left to the bottom of the list.
Usually Australian expats find out they have a problem when they’re overseas and it’s too late.
As part of our services to Australian expats we offer a Pre-Departure Review. This review provides those Australians who are about to move overseas with a review of their assets and outlines a step by step recommendation on what needs to be done to organise your finances before the big move. You can either engage us to implement the recommendations or complete them yourself. As part of this review we cover off on the following topics:
Is your superannuation compliant? Whether you hold an industry, retail or Self-Managed Super Fund if you are leaving the country you need to ensure that your retirement savings are still managed in a compliant manner.
Whether you hold Life, TPD or any other types of insurance inside or outside of your superannuation, just because you are paying the premiums on time doesn’t necessarily mean that it is valid once you leave the country.
Did you know that with the recent legislative changes Australian expats are now required by law to make repayments on their HECS, HELP and TSL student debt, even if you live and work overseas?
A key decision for many Australians who choose to work overseas is whether to sell or rent out their principal residence, which will depend on both personal and financial considerations.
The interest on a margin loan is no longer deductible when an expat becomes a non-resident for Australian tax purposes. This is because the dividend income ceases to be assessable in Australia and is instead subject to withholding tax.
When expats cease to be an Australian tax resident, they are generally deemed to dispose of their CGT assets (other than ‘Taxable Australian Property’) at the market value. While this gives rise to a capital gain or loss at that point, these assets are not subject to CGT for the period they are a non-resident.
On becoming an Australian resident again, they are then deemed to acquire these assets for CGT purposes at the market value with future growth from that point subject to CGT on disposal. The 12-month holding period to be eligible for the 50% CGT discount for individuals commences from the date they become an Australian resident again. These deemed disposal rules are summarised in the following diagram.
An alternative to the deemed disposal described above is for the expat to make an election to defer the CGT event that would otherwise apply on becoming a non-resident.
However, this will mean that all future gains will generally remain taxable in Australia, including the period when they are a non-resident (see diagram below).
It’s important to remember that this election to defer CGT applies to all CGT assets (except Taxable Australian Property) ie you can’t choose to defer the disposal for certain assets only.
The best option for clients who are about to become a non-resident for tax purposes in Australia will depend on individual circumstances, including the size of the capital gain (if any), any carry forward losses and the your cashflow position.
To find out more and to speak to an Atlas Wealth adviser we invite you to contact us for a complimentary discussion.
*This service is provided in conjunction with Robina Financial Solutions, Corporate Authorised Representative of Australian Advice Network Pty Ltd AFSL 472901
General Advice Disclaimer
The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Atlas Wealth Management Authorised Representative before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Atlas Wealth Management nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.