Possibly Moving Overseas - Tax Question

AlexD on 20/11/2017 - 12:04

I couldn’t find a solid answer to this online, so I’m hoping someone here can help!
I’m looking to move to NZ, probably around January. If I were to receive, say, $40k AUD Pay here between June & December, and $45k NZD between January & June, would I pay tax on the whole amount on AUD, the whole amount in NZD, or would my taxable income be considered $40k AUD here, and $45k NZD there?

I understand I must report all foreign income within Australia, and I do have a HECS debt, but will be below the threshold for Medicare levy surcharge. I just do not understand how much tax I can expect to pay.

Thanks in advance!

Financial

Comments

  • retiredfeline on 20/11/2017 - 12:14
    +4

    Are you a tax resident in AU? If so you would be liable for the whole tax amount in AU because you would be still a resident for tax purposes this FY (not based on just length of stay). However as NZ would have a double taxation agreement you would get an offset in NZ for the tax you paid to AU.

    • activ8newbs on 20/11/2017 - 14:25
      +1

      Correct.

      As a tax resident of Australia, you get taxed on your worldwide income. I.e. Aus + NZ Income. You will probably (very likely) also get taxed in New Zealand too.

      But as mentioned above, you'll get an offset for your NZ income :)

      • JimmyF on 20/11/2017 - 15:26

        Whats your source?

        As Australia has agreements with many countries that money earned and TAXED overseas, isn't taxed again here.

        I think you might be thinking of the great USA.

        • redfox1200 on 20/11/2017 - 15:38
          +2

          you won't be taxed twice, but if your Australian tax bracket is higher than the foreign country you will be taxed the difference in the rates.

        • whooah1979 on 20/11/2017 - 15:57
          +2

          Whats your source?

          uni books/foundations of taxation law 2017?

        • JimmyF on 20/11/2017 - 16:11

          @whooah1979: then link us to some great ATO articles saying so

        • whooah1979 on 20/11/2017 - 16:13

          @JimmyF:

          then link us to some great ATO articles saying so

          ask unistudent1. or wait until after they graduate.

        • JimmyF on 20/11/2017 - 16:21

          @whooah1979: why do they need to graduate to send links from the ATO website?

        • whooah1979 on 20/11/2017 - 16:25

          @JimmyF:

          why do they need to graduate to send links from the ATO website?

          unistudent1 is still learning.

        • activ8newbs on 20/11/2017 - 17:06
          +1

          I pay almost $70,000 across 4 years to study Finance and Accounting - This is just some knowledge i've picked up across the years.

          Disclaimer: I'm not a professional yet.

        • activ8newbs on 20/11/2017 - 17:07

          @whooah1979:
          Lol yup close enough

        • activ8newbs on 20/11/2017 - 17:09
          +2

          @JimmyF:

          Don't have links, sorry, but I know it off the top of my head. Studied that particular thing a while back.

          But search key terms "Foreign Sourced Income/Australian Tax Resident/Foreign Tax Offset" and I'm fairly confident you'll find something.

        • CheapskateQueen on 20/11/2017 - 23:49
          +1

          @JimmyF:

          Jimmy you also have the ability to go onto the ato website and see for yourself.

          You have to declare your worldwide income and you get a FITO (foreign income tax offset) for tax paid overseas on the same income https://www.ato.gov.au/Individuals/Tax-return/2017/In-detail…

        • AlexD on 21/11/2017 - 07:09

          @CheapskateQueen: Thank you! This was exactly the link I was looking for! I kept coming across another page, referring to what I would do with superannuation, etc.!

        • JimmyF on 21/11/2017 - 08:50

          @CheapskateQueen: I'm aware, my point was why do they need to graduate to send links from the ATO website? But looks like that went whoosh to you.

        • CheapskateQueen on 21/11/2017 - 09:06

          @JimmyF:

          actually you provided very incorrect information in a very confident manner.. then said

          "JimmyF 16 hours 52 min ago

          @whooah1979: then link us to some great ATO articles saying so"

          when you could have done your own research to confirm your advice was wrong.

        • MathNerd on 21/11/2017 - 14:57
          +1

          @unistudent1:

          I'm not a professional yet

          Gerry Harvey may say otherwise.

    • Love a bargain on 31/01/2018 - 10:30

      you would be still a resident for tax purposes this FY (not based on just length of stay)

      I think that's incorrect, you can become a tax-resident and a non-tax-resident part way through a financial year.

      https://www.ato.gov.au/Individuals/International-tax-for-ind…

      • retiredfeline on 31/01/2018 - 10:42

        Note my phrasing, I didn't write that OP would be a resident for tax purposes the whole FY. Obviously there are such things as liability for part of the FY.

        • Love a bargain on 31/01/2018 - 10:50

          Not quite sure what you're getting at.

          Just to be clear, my understanding is that OP only has to pay Australian tax on the AUD40k he earns in Jul to Dec (i.e. when he's an AU tax resident). The NZD45k that he will earn in Jan - Jun (i.e. when he's not an AU tax-resident) is not subjected to Australian tax but will, of cos, be subjected to NZ tax.

        • retiredfeline on 31/01/2018 - 10:50

          @Love a bargain: Nothing I wrote contradicts what you are saying. It all depends on the OPs situation. If he is a NZ resident then of course his tax residency will change. But it's not clear from the post at the time.

        • Love a bargain on 31/01/2018 - 10:53

          @greenpossum:

          Just not how that paragraph reads to me. It sounded as though you're suggesting that the OP would be subjected to worldwide taxation for AU tax purposes for the whole of the FY, rather than just the part of the year when he's a tax resident. (Otherwise the whole double taxation treaty should not even be an issue.)

        • retiredfeline on 31/01/2018 - 10:55

          @Love a bargain: It depends on OP's residency for tax purposes situation. The adjective whole qualifies "income", not FY.

  • airzone on 20/11/2017 - 13:07

    Might be interesting reading for you: https://www.ato.gov.au/individuals/international-tax-for-ind…

  • whooah1979 on 20/11/2017 - 15:53
    +2

    I’m looking to move to NZ, probably around January.

    are you coming back?

    • activ8newbs on 20/11/2017 - 17:06
      +2

      This also may affect your tax liability. ^

    • AlexD on 21/11/2017 - 07:13

      Probably eventually! I’ve been in Canberra for seven years, and want to move somewhere more city-like, but with a similar population - I like it quieter and can’t stand peak hour traffic anymore. I love Wellington and I’m in my mid-20s with nothing tying me down, so I thought I’d give it a go for at least a few years!

      For some relevance to this post, though - not this or next financial year!

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