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Moving Overseas

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Replies 21

Hi ATO, 

 

My question is two fold. 

 

1. I departed Australia just over six months ago with my wife and reside in Europe. Due to the pandamic, I left my job in Australia and moved to Europe and living with my wife and her family. I am still unemployed and waiting for my residency permit over in an EU country to start work.

My questions are: Do I need to declare my self as a non - resident for tax purposes or continue to be one until I find future employment?

I also have an HECS loan I have been repaying and want to keep repaying. How to I make these payment once I am employed overseas? (I have notified the ATO that I left the country and planned on residing overseas - more than 183 days). 

 

2. Superannuation- When I logged on to mygov my one of my acounts are not showing up. Why is that? The account in question AMP, a few months ago changed its supper plan due to a change over (Something to do with their restructure) and also moved me to a different account since I am no longer employed. How do I make mygov show me my balance on this account?

If I am not returning to Australia for along time can I cash my superout and pay my HECS with it?

 

Thank you for taking the time to answer my questions. 

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Most helpful response

ATO Certified Response

ATO Community Support

Replies 20

Hi @SpeedBird

 

Your employment, or whether you're out of the country, aren't the only things which impact your residency status. You'll need to use the residency tests to confirm your residency status for tax purposes.

 

How you make HELP repayments will depend on whether they're compulsory repayments or voluntary ones. 

 

For compulsory repayments, if your worldwide income is more than $11,470 AUD, you'll need to report your worldwide income. If you need to make a compulsory repayment, we'll send you the payment details. 

 

For voluntary repayments, nothing changes - you use the same methods as before. 

 

For payment options, see how to pay. You can get your payment reference number through your online services:

  • scroll to Loan Accounts
  • select the name of the loan account
  • select Voluntary payment
  • select BPAY.

 

Regarding your superannuation, your fund is only required to report your balance to us once per year. This means that the accounts you hold may not reflect the right funds, number of accounts, or balances for a while. Rest assured, they will report it to us, it will just take time to reflect on your online services. In the meantime, your fund likely has its own online services you can use. 

 

There are very limited circumstances in which you can access your super early, even if you've left Australia. Superannuation is intended to be used to fund your retirement, whether or not that's in Australia. This means you likely won't be able to access your superannuation to pay off your education loan. 

 

Hope this helps! Smiley Happy

21 REPLIES 21

Most helpful response

ATO Certified Response

ATO Community Support

Replies 20

Hi @SpeedBird

 

Your employment, or whether you're out of the country, aren't the only things which impact your residency status. You'll need to use the residency tests to confirm your residency status for tax purposes.

 

How you make HELP repayments will depend on whether they're compulsory repayments or voluntary ones. 

 

For compulsory repayments, if your worldwide income is more than $11,470 AUD, you'll need to report your worldwide income. If you need to make a compulsory repayment, we'll send you the payment details. 

 

For voluntary repayments, nothing changes - you use the same methods as before. 

 

For payment options, see how to pay. You can get your payment reference number through your online services:

  • scroll to Loan Accounts
  • select the name of the loan account
  • select Voluntary payment
  • select BPAY.

 

Regarding your superannuation, your fund is only required to report your balance to us once per year. This means that the accounts you hold may not reflect the right funds, number of accounts, or balances for a while. Rest assured, they will report it to us, it will just take time to reflect on your online services. In the meantime, your fund likely has its own online services you can use. 

 

There are very limited circumstances in which you can access your super early, even if you've left Australia. Superannuation is intended to be used to fund your retirement, whether or not that's in Australia. This means you likely won't be able to access your superannuation to pay off your education loan. 

 

Hope this helps! Smiley Happy

Initiate

Replies 19

Hi @BlakeATO ,

 

Thank you so much for your comprehensive and prompt response. It is very appreciated. 

 

So to clarify things:

 

1. Tax resident status: Even if a residence test shows that, if I wish I could declare myself as a ' non - resident for tax purposes' , I don't need to do so, as long as I report my worldwide income (once employed) and lodge a tax return every financial year (pay taxes in both countries - in case, the country I reside and work have a lower tax rate) . This will ensure I will have access to social benefits (medicare, jobseeker etc.) if I happened to return to Australia and if the need arises. The 'resident or non - resident for tax purposes' status does not have a bearing on my Citizenship status?

 

2. Help repayments: Once I have a worldwide income of more that $11,470 AUD, I will need to report my worldwide income and make the compulsory repayments and the ATO will provide send me the payment details. If I am still unemployed, come this financial year, would I have to make a compulsory payment? and for voluntary repayments, nothing changes - I will use the same methods as before. 

 

3. Superannuation:  Understood what you stated. Just to clarify and revisit a conversation I had with the ATO a while ago, if my superannuation account does not have any funds going in (due to unemployment or working overseas), after 18 months, the superfund will transfer my remaining funds to Ausfund (managed my the government) and will remain until I am at retirement age to cash it out?

 

Again, I would like to thank you for your previous response and thank you advance for answering the questions above Smiley Happy

 

Kind regards,

ATO Community Support

Replies 18

Hi @SpeedBird

 

Your tax residency and your actual residency are entirely separate - you can be any combination on a punnet square of tax resident and citizenship/permanent residency. How you declare on your tax return will not change your entitlement to Medicare, Services Australia payments, or superannuation - that's what your actual residency is for. 

 

You need to declare your tax residency according to whether or not you meet one of our residency tests.

 

 

Your compulsory repayment threshold will still stay the same, even when earning worldwide income instead of Australian-based income - for the 2021 financial year, if your repayment income is below $46,620 AUD, you won't need to make any compulsory repayments.

 

 

Regarding your super - not necessarily. 

 

You can prevent yourself from becoming a lost member by doing a few things:

  • you can contact the fund and tell them you wish to remain a permanent member, or
  • you can confirm your address is up to date every two years. 

 

Where a fund has an old address (that is, not confirmed in the past two years), and has not received contributions for the past 12 months from you (or a rollover of funds), they will then send the funds to us, the ATO, as lost super. 

 

 

I hope this makes sense and helps clear it up! Smiley Happy

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Replies 17

Hi @BlakeATO ,

 

Thank you so much for your in depth response. It really helped. 

 

Looks like accroding to the residecy test, I will have to declare myself as a non-resident for tax purposes. 

 

Thank you again. 

 

Best regards

Initiate

Replies 16

Hi @BlakeATO ,

 

Just want to clarify one more thing. 

 

I left Australia just over 7 months ago. Since I am now residing in Europe with my spouse (both Australian citizens) - I just got my permentant residency in Italy and my wife is an Italian Citizen (Dual). I believe since we do not wish to return to Australia anytime soon abdaccording to the residency for tax purposes - we are to declare ourselves as Australian citizens for non - tax purposes. Where do I declare myself on mygov? Also once I have done that can I still my bank account active in Australia even though declare myself as a non resident for tax purposes? 

 

Thanks again for all your help. 

 

cheers

 

ATO Community Support

Replies 15

Hi @SpeedBird

 

You'll need to identify you are no longer a resident for tax purposes in your tax return. You may still have an obligation to lodge future returns since you have HECS. Either way you can still lodge and let us know your residency status.

 

What date did you leave Australia? Was it during the 2019 -2020 financial year? If you completed a tax return for  2020 FY, you can amend it if you considered you were no long a resident on the day you left. You'll select you were a resident for part of the year and specify the dates.

 

Bank accounts can still be held by foreign residents. 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%.

 

Ari

Initiate

Replies 14

Hi @AriH ,

 

Thank you for your response. 

 

We left Australia on the 27th of June 2020 ( three days before end of financial year). I did my 19/20 FY tax return remotely. The reason I didnt want to edit the existing tax return was due to recieving a small payment from my previous employer on the 02 of July 2020 (for the work I did during the week of my departure) and bank interest. I also read that after you have left the country, you need to prove and take the recidency test (183 days etc) before your could declare yourself as a recident for non - tax purposes and with all the COVID distruptions we didnt quite know where we would end up or would return back home. 

 

Accroding to the recidency test we should declare ourselves as residents for non tax purposes. We have now permently moved and reside in Italy.

So to finalise things, can you kindly give me some answers to the following:

1. Can I do an ADHOC tax return now or do I have to wait till the end of the financial year 20/21 so I could declare my residency?

2. Once I am employed again, I would need to report my worldwide income for HELP. repayments. How do I do this? Once I do this I would pay the threshold as same as rate in Australia. That means I wouldnt pay double tax (Aus/Overseas) but just the HELP repayment ammount since I wil be a resident for non-tax purposes. For voluntery payments it will be the same BPAY number. 

3. According to Blake (the previous reply) if we return to Australia for some reason down the track, we will be still entitled to medicare services even though we are non residence for tax purposes and wouldn't be paying the medicare levy? Can you confirm this. 

4. Once do our tax return and delacre our tax residency, we won't have to do a tax return again? Can we still earn interest from our banks if we still have our funds in our accounts wnd pay a hire tax whithold by the bank?

We are contacting our banks to let them know our tax residency status and to stop recieving interest and to close extra acccounts. 

 

Thank you so much for your prompt response and for your assistance in advance for all my questions. 

 

You guys have been most helpful.

 

Kind regards,

ATO Community Support

Replies 13

Hi @SpeedBird,

 

1. Can I do an ADHOC tax return now or do I have to wait till the end of the financial year 20/21 so I could declare my residency?

Yes, you can print off the 2020 paper return from our website. Just cross out 2020 and put 2021 if you want to lodge early.

 

2. Once I am employed again, I would need to report my worldwide income for HELP repayments. How do I do this? Once I do this I would pay the threshold as same as rate in Australia. That means I wouldn't pay double tax (Aus/Overseas) but just the HELP repayment amount since I will be a resident for non-tax purposes. For voluntary payments it will be the same BPAY number. 

See the link below for reporting overseas income for HELP debt. We use the threshold amount to assess whether you have a compulsory HELP repayment to make.

 

If you are a non resident for tax purposes you will only pay tax on Australian earned income (even if you report worldwide income for HELP repayments). If you previously used BPAY to make a HELP repayment then it should still be the same BPAY no'. 

 

Does your Australian bank have your overseas address? If so they withhold 10% tax on bank interest. If not you will be liable for 10% tax on the bank interest when you lodge.  

 

3. According to Blake (the previous reply) if we return to Australia for some reason down the track, we will be still entitled to medicare services even though we are non residence for tax purposes and wouldn't be paying the Medicare levy? Can you confirm this. 

If you return to Australia it will depend on the Visa you're on whether you are entitled to Medicare services.

 

4. Once we do our tax return and declare our tax residency, do we have to lodge future returns? Can we still earn interest from our banks if we have funds in our accounts and pay directly through the bank?

If the bank has your overseas address, as advised above, they will withhold the tax. If not you will need to lodge. 

 

Links -

Individual tax return - 2020.

Overseas repayments.

Compulsory HELP threshold.

Interest - Foreign residents.

 

All the best.

Initiate

Replies 12

Hi @Jodie_ATO ,

 

Thank you for answering all my questions. 

 

To close and finalise this conversation, I would like to confirm the following:

For Medicare related question - We are both are Australian Citizens. So would be still entitled to this service if we wish to return to Aus down track?

 

Early logements - Is that the paper print version in Red? If thats the case, I understand that I would need to fill the form and post it to the adress with the year changed to 2021 with a pen. 

I have gone through the whole form but couldn't find an area to indicate that I am declaring 'non- resident for tax purposes'. Is it the area that says ' future lodgment of Australian tax return' and say NO?

Also, since my wife recieved all her payments last financial year (unlike me recieving my last weeks pay this finalcial year - hence having to submit an ADHOC one for 20/21), can she just ammend her last years tax return to indicate that she no longer wishes to be a tax resisdent? If so which specific section? Otherwise we will both fill out and lodge a paper lodgement.

 

We both departed Australia on the 27th June 2020. Reading the paper version of the tax form -  it doesnt indicate anywhere where I could show that I was overseas from 01 Jul 2020. Does that mean I am considered a non resident for tax purposes from the time I submit the early 21 tax return? or is backdated to when I departed Australia? Also, in regards to the address on the form, do I change it to the current overseas address in the top section of the form but still tick Australian resident?

 

Updating the banks - We have now informed our  banks of our overseas adresses and have notified of our residency status. 

 

Thank you again for your help on this one. All of you who answered my questions have been excellent and you have helped us alot. 

 

Thank you again, 

 

Best regards