Tax Financial Planning for Australian Expats
Are your financial decisions tax effective?
Tax Financial Planning is a service provided by an Expat Financial Adviser and differs from the tax services provided by an Accountant. It is critical to the overall success of your financial plan. Tax Financial Planning for Australian Expats is often provided as a supplementary service to compliment other foundational services within a financial plan and includes:
Planning for and consideration of your longer-term objectives
Strategically arranging your financial position and transactions to minimise your overall tax outcome
Considering the ever-evolving tax landscape that applies to non-residents
Staying informed and up-to-date with tax legislation to take advantage of tax saving opportunities and avoid uncertainty
Complimenting your overall financial plan
How we can help you optimise your financial position for tax purposes as an Australian Expat
Tax financial planning for Australian Expats is highly important as the tax legislation that applies to a non-resident is vastly different to that of a resident taxpayer. Further, the tax legislation is often subject to change, usually to the detriment of Australian Expats. The abolition of the main residence exemption for Australian Expats in 2019 is a prime example of this. For Australian Expats, keeping up-to-date with tax laws to ensure your financial position is optimised can be burdensome and lead to uncertainty when making financial decisions.
Runway Wealth Management can help alleviate the stress associated with making financial decisions as an Australian Expat. Through careful planning and an in-depth understanding of your situation, our tax financial planning advice can allow you to make informed decisions, advance your financial position and minimise your overall tax outcome. Some of our solutions include:
Does a non-resident for Australian tax purposes pay tax in Australia?
Yes, but only on certain income. If you are a non-resident for Australian tax purposes, you generally only pay tax on income sourced in Australia, not your worldwide income. Examples of Australian-sourced income includes: • Employment income earned in Australia; • Rental income from Australian property; • Australian investment income (e.g. shares, interest are often subject to withholding tax). For non-residents, it is important to note: • Foreign income is generally not taxed in Australia if considered a non-resident for tax purposes; • Tax applies from the first dollar earned (there is no tax-free threshold); • The distinction between taxable Australian property (TAP) and non-taxable Australian property (non-TAP); • The Medicare levy does not apply to non-residents. In summary, a non-resident does pay tax in Australia, but only on Australian-sourced income.
What is deemed disposal for Australian Expats?
Deemed disposal is a tax rule that applies when you cease being an Australian tax resident. It means you are treated as if you sold certain assets at their market value on the date you leave Australia, even though no actual sale has occurred. This can trigger a Capital Gains Tax (CGT) event based on any unrealised gains to that point. Key points include: • Applies when you become a non-resident for tax purposes; • You are “deemed” to dispose of assets at market value at departure; • Typically affects assets like shares, ETFs, managed funds and cryptocurrency; • Australian property (taxable Australian property) is generally excluded; • The application of deemed disposal is optional, you can choose to defer the CGT event until the asset is actually sold. In summary, deemed disposal is a rule that locks in capital gains or losses when you leave Australia, ensuring Australia taxes gains accrued while you were a resident.
How does tax financial planning differ for Australians living overseas?
Tax financial planning for Australians living overseas differs from domestic tax financial planning because it takes into account multiple tax systems, residency rules, and cross-border financial considerations. Rather than focusing on a single tax system, tax financial planning for Australians living overseas aims to optimise outcomes across multiple jurisdictions while ensuring compliance and flexibility as circumstances change. At Runway Wealth Management, our Australian Expat tax financial planning service is typically provided as part of a broader strategy such as: • Ensuring the correct amount of Australian withholding taxes are applied to investment portfolios in Australia; • Utilising the tax advantages of assets such as shares and ETFs, which are generally exempt from Australian CGT for Expats; • Optimising the CGT impact when selling Australian assets through Superannuation contribution strategies.
How can a Financial Adviser help an Australian Expat with tax financial planning?
A Financial Adviser can play a critical role in helping Australian expats manage the complexities of cross-border financial planning. When living overseas, financial decisions are no longer confined to the Australian tax system and professional advice helps ensure your strategy remains efficient, compliant, and aligned with your long-term goals. As Financial Advisers to Australian Expats, Runway Wealth Management can assist with tax financial planning by: • Structuring compliant investments that are suitable for Australians living overseas; • Recommending strategies that improve tax efficiency; • Guiding decisions around contributions, withdrawals, ownership structures and capital gains tax implications for Australian assets such as superannuation, shares and property; • Integrating tax strategy with broader financial goals, including retirement planning, cash flow and wealth creation.
Tips to consider for Australian Expats & Tax Financial Planning
General Advice Disclaimer
The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.