5 Tax Tips for Expatriates Returning to Australia

We know you have plenty of things to do when planning for your return back to life in Australia. Not least is to organise your Australian tax affairs. Australia’s tax system is complicated and can be costly for the unaware. After all, you don’t want to have tax regrets just because you didn’t get around to proper planning before arriving back in Australia.

To help you focus on the most important tax planning opportunities, we’ve listed our top 5 tax tips for expatriates returning back to life in Australia.

1.     Private health insurance

This can save you thousands as soon as you step off the plane. Make sure you have the appropriate level of private health insurance upon your return to Australia. Or, better yet, at the time of your departure from your country of residence. 

If you don’t have the appropriate level of insurance, you may be liable to pay extra tax (between 1% to 1.5% of your taxable income) for every day you’re not covered. Taking out an insurance policy can be cheaper than the Australian tax you will otherwise have to pay.

2.     Make sure your overseas income is paid-out before returning home

Once you’re back in Australia, you’ll be paying tax on your worldwide income. So, make sure all of your foreign salary, bonuses, allowances, foreign company dividends, and employee share scheme income are paid to you before coming home. 

3. Review the ownership structure of your assets

When re-commencing your Australian residency, there are lots of reasons to re-assess the ownership structure of your assets. Whether it’s to take advantage of lower marginal tax rates or your investment tax losses, to better utilise the main residence exemption and Australian superannuation or to put in place more robust Australian trust and company structures.

4. Obtain valuations and your assets

In most cases, for any assets you own that are not Australian real property, you will be deemed to have acquired them for their market value on the day you return to Australia.

For your assets that do not have publicly listed prices, you’ll need to obtain their valuations yourself. Importantly, if valuations have recently dipped or worse yet, crashed, consider how you can plan around this before arriving back in Australia.

5. Make a smooth exit

Lastly, ensure you make a smooth exit from your country of residence and do not incur any unanticipated foreign or Australian taxes.

Seek local expertise on the impact of departing your country of residence. Are there any laws that might cost you unexpected exit taxes or require you to file lodgements in the future? What notifications do you need to give?  

In Australia, make sure you’re aware of the tax implications of your arrival. For example, understanding what happens to your foreign superannuation and how that may be taxed in Australia is another critical step in the arrival process.

If you’d like some assistance with your taxation, reach out to Dean Crossingham,

Head of Accounting at Stanford Brown.

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