I am a Singapore citizen and residing in Singapore. My daughter is studying and residing in Australia. We have a joint savings account. The bank is withholding tax on the interest. Should the tax rate be 10% or 47%? Thanks.
With your daughter residing in Australia, and therefore presumably an Australian resident for tax purposes, if her tax file number hasn't been allocated to the account the higher rate will apply. See the following page from which the following quotes have been copied:
You - "If you've given the financial institution your overseas address, the tax will be withheld at the rate of 10%. Without your overseas address, tax is withheld at 47%."
Your daughter - "If your bank doesn't have your tax file number (TFN), it will withhold tax from your interest at the highest marginal tax rate."
With your daughter residing in Australia, and therefore presumably an Australian resident for tax purposes, if her tax file number hasn't been allocated to the account the higher rate will apply. See the following page from which the following quotes have been copied:
You - "If you've given the financial institution your overseas address, the tax will be withheld at the rate of 10%. Without your overseas address, tax is withheld at 47%."
Your daughter - "If your bank doesn't have your tax file number (TFN), it will withhold tax from your interest at the highest marginal tax rate."
Thanks for your answer, knaresbro. I have given the bank my overseas address. However, my daughter does not have a TFN. I suppose that is why we have been taxed 47%.
My daughter is under 21 years of age. If my daughter applies for a TFN, will that help to lower the tax to 10%?
What are the implications if my daughter applies for a TFN? Does she then have to file a tax return every year?
Thanks.
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