To guarantee a safe and relaxed atmosphere while abroad, here is a bunch of things you should sort out before leaving Australia. This list is based on stuff I had to do. Note, the following is only after you have decided that you are going to become a non-resident for Australian taxation purposes. This you become automatically if you consider yourself “living” overseas and are not going on a limited short term contract or transitory fly in.
For me, I am a non-resident for Australian taxation purposes.
Note: The following is NOT advise. It is what I did and I'm sharing this with you. I highly recomment you seek expert advise from a financial / tax specialist like http://smats.net who I use to take care of all financial needs. Yes I searched long and hard to find these guys since most financial / tax specialists I spoke to in America were unsure how to best manage my international investments in light of also being a full time tax resident in America.
Stuff to do before you leave Australia
- Notify your banks and inform them that you are leaving Australia and thus are a non-resident for tax purposes. This will allow your banks to automatically deduct 10% from your interest when it is credited to your account.
- I left my Superannuation where it is. You now have the right to pull it out should you be in a financial hardship but it’s safer to leave it there in case you return. Also it’s not worth making any superannuation contributions whilst you are abroad since no tax deducation is available to make this a worthwhile excercise.
- If you have a family home in Australia it is best to rent it out. I did. However it becomes a taxable income in Australia and must be reported to the ATO. However all costs related to the ownership are claimable and offset any tax. Basically your family home becomes an investment property and you will start accumulating tax credits should you return back to Australia. Tax credits can be used later to offset your taxable income once you start working in Australia potentially providing years of tax free income. Of course pending on the amount of investment property you have to do this.
- If you have property investments and are they receiving an income you will need to file an Australian Tax return every year. Find a good accountant who you can relay on to look after your investments in Australia and have the ability to communicate via email with them. You want to make sure your assets are well protected and you have a team of specialists who will look after your best interest.
- HECS (if you still own it) will continue to be due should your taxable income in Australia be over the $36K mark. Else there is no requirement to repay the loan unless you wish to make voluntary payment. I’m lucky to have repaid mine a few years back. Before you leave, try to repay it if you can so you don’t have this cloud over your head while abroad.
- Your Australian credit cards are worth keeping. If you have credit cards with annual payment just keep them running. There is nothing more damaging then to shut down your credit card and have your credit history erased. Also should you visit Australia (and you will) you will want to use one of those credit cards to make payments. Just make sure you have repaid your credit card dept before leaving Australia.
- Finally, nominate someone you can trust to be your mail handler. You will still receive mail and will want to make sure that this person you trust can either scan the mail and email it to you. You can also check out http://www.earthclassmail.com/ which scan your postal mail and emails it to you automatically for a very reasonable fee.
Now your set to go and explore the new land of opportunity.
Latest posts by Ernest W. Semerda (see all)
- Term Sheet Economics & Control: A Blueprint for your future relationship with your Investor - April 17, 2016
- The Players in Raising Capital - March 21, 2016
- Secrets of a childhood Strider Balance Bike. A great reminder for us all Why Less is More. - March 11, 2016