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Non Resident For Tax Purposes: 1) Subject to normal income tax at non resident rates on wages earned in Australia and investment income earned in Australia that is not subject to withholding tax or imputation credits. 2) Subject to capital gains tax on gains made on assets "connected with Australia" 3) If an Australian resident becomes a non resident they have 3 choices as to how they deal with their assets that are not "connected with Australia" and were acquired after 19th September 1985. a) Deemed them to have been disposed of when they leave and pay the CGT. As a result no Australian CGT will be payable on any gains while a non resident b) Defer the CGT and pay it when the asset is sold but the tax will be on the gain over the whole period up to the sale including when a non resident. c) Defer the CGT on the basis you will be returning to Australian Residency before you sell it but when you do sell there will be no exemption for the gain made while you were a non resident. Residents For Tax Purposes That Are Overseas: 1) Under certain conditions overseas employment income exempt from tax in Australia but taken into account in determining tax bracket. 2) Subject to normal income tax at resident rates on interest, royalties, dividends and rental income no matter where in the world it was earn. But entitled to a credit for any foreign tax paid. 3) Subject to capital gains tax on any gains made on any assets anywhere in the world. But entitled to a credit for any foreign tax paid. Note: All of the above is written for the small investor not companies or trusts and there are more complex rules if you have a significant investment in a foreign entity. |
