Australians returning from overseas because of the covid-19 pandemic risk facing increased tax implications in the country they resided in, even if this was for a short period of time, law firms warned today.
Sydney-based law firm HLB Mann Judd said thousands of returning Australians will have to reassess their tax obigations on returning to Australia. Around 40,000 Australian citizens are currently registered with the government to be planning to return home imminently.
Bembrick warned, "Even if someone has been living and working abroad for a relatively short period of time, it can still result in a hefty tax bill on their return to Australia."
Even if someone has been living and working abroad for a relatively short period of time, it can still result in a hefty tax bill on their return to Australia."
He added: "Property is another key consideration. Some countries charge non-residents a higher rate of transaction tax or tax capital gains on profits from property investments and, in Australia, if you've retained property while abroad, you may be better to move back first before selling."
"This applies particularly to the former family home, as non-residents selling property are now excluded from the CGT main residence exemption and the related ‘six-year absence' rule.
"The CGT discount on the sale of investment properties is not available for any period after 8 May 2012, during which someone is a non-resident. For investment properties already owned at the time they left to move overseas, there will need to be an apportionment of the CGT discount for the relevant periods. A similar apportionment applies for periods between the date they return to Australia and a later property sale."
"People who have been living and working in London for example, often on a high income, need to pay close attention to their pension savings and how to transfer the funds back into the Australian superannuation system," Bembrick cautioned.