Neither my NZ registered accountant nor I can find out why the ATO, without explanation, is charging me tax. Phoning the ATO has proved unsuccessful. and I have not received a response to my written request for a written reply. I am now a permanent New Zealand resident, and in accordance with the double tax agreement, I must pay my tax in New Zealand not Australia. I have three sources of Australian income. 1) Commonwealth Government Superannuation: My Superannuation tax statement says "non assessable, non exempt" and is not taxed at source. Do I have to pay tax on this income? 2) Rental income: If I no longer live in Australia, may I still deduct rental property expenses? 3) Interest payments on my bank account. While I include these on my tax return, I am concerned about withholding tax. Should I be paying withholding tax and if so, does the payment make a difference to whether or not I may deduct rental expenses. I wonder if perhaps the tax I am paying to the ATO is withholding tax? Thank you very much to anybody who can answer my questions.
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Hi @Monteagle,
We appreciate your patience while we did our investigations.
You’ve 3 sources of income which are:
1. Commonwealth Government Superannuation
2. Rental income
3. Interest payments
Commonwealth Government Superannuation payments are non-assessable and non-exempt (NANE). You don’t pay tax on NANE payments. They can’t be used to offset current or carry-forward losses.
Yes, you can deduct rental property expenses from your rental income even if you no longer live in Australia provided there’s a connection between the deductions and the assessable rental income. If you've net rental property income, that income is taxed in Australia. As you’re not a resident of Australia, you don't have a tax-free threshold. If your net rental losses and net exempt income, interest incomes less withholding tax, you offset the rental against the net exempt income.
Paying withholding tax on interest income from Australian banks accounts doesn’t deny you rental deductions. Banks are required to withhold tax from interest income paid to a non-resident. The rate of withholding is 10%.
You correctly include your interest income in your tax return as whilst the interest income is tax free, they’re used to determine tax losses of earlier income years that you can deduct. Unlike NANE income, interest income on which withholding tax has been paid, net exempt income, is not NANE income. It can be used to offset losses. Losses that are carried-forward losses are offset first against any net exempt income and then against assessable income. Losses must be utilised in the order in which they were incurred.
Financial institutions are required to give you notice or make information available. Penalties can be given for failure to give notice or make information available. An entity that is given a summary notice is required to keep that record for 5 years after the end of the financial year.
Based on the information in your post, it's likely that we didn’t issue the tax statement you received as we’re not required to for a foreign payee that tax had withheld.
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Hi @Monteagle
We'll check this out for you and let you know.
Hi @Monteagle
Our technical team are wanting to know if you can provide some more info. I'll send a message to your registered email address.
Hi @Monteagle,
We appreciate your patience while we did our investigations.
You’ve 3 sources of income which are:
1. Commonwealth Government Superannuation
2. Rental income
3. Interest payments
Commonwealth Government Superannuation payments are non-assessable and non-exempt (NANE). You don’t pay tax on NANE payments. They can’t be used to offset current or carry-forward losses.
Yes, you can deduct rental property expenses from your rental income even if you no longer live in Australia provided there’s a connection between the deductions and the assessable rental income. If you've net rental property income, that income is taxed in Australia. As you’re not a resident of Australia, you don't have a tax-free threshold. If your net rental losses and net exempt income, interest incomes less withholding tax, you offset the rental against the net exempt income.
Paying withholding tax on interest income from Australian banks accounts doesn’t deny you rental deductions. Banks are required to withhold tax from interest income paid to a non-resident. The rate of withholding is 10%.
You correctly include your interest income in your tax return as whilst the interest income is tax free, they’re used to determine tax losses of earlier income years that you can deduct. Unlike NANE income, interest income on which withholding tax has been paid, net exempt income, is not NANE income. It can be used to offset losses. Losses that are carried-forward losses are offset first against any net exempt income and then against assessable income. Losses must be utilised in the order in which they were incurred.
Financial institutions are required to give you notice or make information available. Penalties can be given for failure to give notice or make information available. An entity that is given a summary notice is required to keep that record for 5 years after the end of the financial year.
Based on the information in your post, it's likely that we didn’t issue the tax statement you received as we’re not required to for a foreign payee that tax had withheld.
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