Announcements
On 21 July the government announced proposed changes to the JobKeeper program. These changes don’t affect Jobkeeper payments until after 28 September 2020.

ATO Community

Filing Tax Return in Australia - Should NZ income be included along with rental properties details

Highlighted

Newbie

Views 3912

Replies 4

Hi,

 

I am trying to cover multiple questions in this forum and hopefully it will help other people too.

 

We have recently moved from New Zealand to Australia(part way through Australian financial year). We are living in Australia as Australian residents, not New Zealand citizens.

 

Question: We have a couple of rental properties in NZ. Do we need to fill their income and expenses details when filing tax return in Australia or just need to file a tax return for those in NZ?

 

As we moved part way through financial year, do we just include our income from April 2018(we moved in April) to June 2018 or include the NZ income as well from July 2017 along with Australian income? We have already filed a tax return in NZ for their financial year(1st April 2017 to 31st March 2018).

 

Thanks a lot in advance

1 ACCEPTED SOLUTION

Accepted Solutions
Highlighted

Best answer

ATO Certified

Devotee

Replies 2

Hi @kiwi_sam,

 

Welcome to our Community! The most important factor in working out your tax requirements is establishing whether you're an Australian resident for tax purposes. Residency for tax purposes is very different to residency for immigration or social security purposes, and affects how much tax you'll need to pay and how to lodge.

 

If you are a resident for tax purposes, any income or capital gain you make from overseas is generally taxable in Australia and needs to be declared in your Australian tax return for the relevant financial year. If you have already paid tax on this income in another country, you may be entitled to the foreign income tax offset.

 

If you're not a resident for tax purposes, you would only need to declare any income you earn from within Australia in a tax return for that financial year. If you didn't receive any Australian sourced income from April 18 - 30 June 18, you won't need to lodge an income tax return.

 

Check out our guide on how tax works in Australia to learn more.

 

Hope that helps!

 

 

4 REPLIES 4
Highlighted

Best answer

ATO Certified

Devotee

Replies 2

Hi @kiwi_sam,

 

Welcome to our Community! The most important factor in working out your tax requirements is establishing whether you're an Australian resident for tax purposes. Residency for tax purposes is very different to residency for immigration or social security purposes, and affects how much tax you'll need to pay and how to lodge.

 

If you are a resident for tax purposes, any income or capital gain you make from overseas is generally taxable in Australia and needs to be declared in your Australian tax return for the relevant financial year. If you have already paid tax on this income in another country, you may be entitled to the foreign income tax offset.

 

If you're not a resident for tax purposes, you would only need to declare any income you earn from within Australia in a tax return for that financial year. If you didn't receive any Australian sourced income from April 18 - 30 June 18, you won't need to lodge an income tax return.

 

Check out our guide on how tax works in Australia to learn more.

 

Hope that helps!

 

 

Highlighted

Newbie

Replies 1

Everything you said makes sense.

 

I can easily calculate income from overseas for the Australian financial year.

 

The part I am struggling with is - How can I possibly calculate tax paid overseas?

 

Reason for asking this: Tax I paid in NZ includes income earned between April and June 2018 which won't apply in Australia as I moved here in July 2018 and NZ tax summary shows the total tax paid, not tax paid per month(no tax department would show it that way as that's not how tax works)

 

Really hope someone can answer this question as I am pulling my hair out for this one

 

If I include the whole tax paid amount then it will be unfair on ATO as I will be claiming more. If I don't include tax paid in NZ then it's unfair on me as I shouldn't be paying double tax in countries that have double tax agreement

Highlighted

Community Support

Replies 0

Hi @kiwi_sam,

 

Thanks for your patience whilst we checked information.

 

Firstly, you only have to declare income from New Zealand that you receive after you become an Australian tax resident. (Note that a holder of a permanent resident visa is not necessarily the same thing as an Australian tax resident.)

 

However, if you are a temporary resident for tax purposes on a temporary migration visa, you might  not need to declare the income from New Zealand. If you have  to declare foreign income an Australian tax resident, then you can be entitled in Australia to a foreign income tax offset for tax paid on that income in New Zealand.

 

Secondly, the foreign tax credit is intended to ensure that tax is not paid twice on the same income in Australia and New Zealand. There are some practical issues around when the offset can be claimed. For example, as an offset can’t be claimed until the foreign tax has been paid and disparities between tax years need to be taken into account. Similarly, for part year taxation of foreign income, a reasonable apportionment of income and foreign tax paid would need to be calculated. 

 

You can find information about When a foreign income tax offset applies and Special amendment rules for foreign income tax offsets on our website.

 

Our website states:

 

It is not necessary for you to have paid the foreign income tax in the same income year in which the income or gain on which the tax has been paid is included in your income for Australian income tax purposes. The tax could be paid before or after the income year in which you derive the income. However, the offset can only arise when the foreign income tax is paid, and it is applied to the income year in which the relevant income or gain is included in your assessable income.

 

Hope this helps, JodieH.

Highlighted

Community Support

Replies 0

Hi @kiwi_sam,

 

Thanks for following up with us!

 

We're checking information with a specialist area regarding your query and we hope to get back to you as soon as possible.

 

Thanks, JodieH.