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Re: Taxation on managed fund distributions as a foreign resident

Newbie

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Replies 8

Hi,

I'm an Australian citizen but moved overseas a year ago and now am a foreign resident for tax purposes. I have a couple of ETFs which I have purchased both before and after moving overseas and I am trying to understand the tax on them.


I have just gone into the management portal for the ETFs and marked myself as foreign, previously they thought I was still an Australian tax resident. I read somewhere that foreign residents will not get taxed on dividends on Australian shares (but also don't get the franking benefits).


Under the "Managed fund distributions" section of my tax return, I can see that there's quite a bit of "Credit/Tax withheld". Is it possible to get this back? I've already submitted and paid for the tax return this applies to.

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Most helpful response

Former Community Support

Replies 3

Hi @chooknet,

 

If you've made a mistake on an income tax return you've already lodged, you can request an amendment to your income tax assessment. (If you think we've made a mistake processing your return, you should phone us to see if we can sort it out without the need for an amendment.) See Correct (amend) an income tax return.

 

For further information on dividends and managed funds please refer to Investment income and royalties paid to foreign residents and Interest, dividends, royalties and MIT payments.

8 REPLIES 8

Former Community Support

Replies 1

Hi @chooknet,

 

This is a good question. We're going to look into it a little further with the appropriate team to find out for you. I'm curious too!

Newbie

Replies 0

Hi Josh,

Thanks for looking into it! 

 

Looking forward to hearing more

Most helpful response

Former Community Support

Replies 3

Hi @chooknet,

 

If you've made a mistake on an income tax return you've already lodged, you can request an amendment to your income tax assessment. (If you think we've made a mistake processing your return, you should phone us to see if we can sort it out without the need for an amendment.) See Correct (amend) an income tax return.

 

For further information on dividends and managed funds please refer to Investment income and royalties paid to foreign residents and Interest, dividends, royalties and MIT payments.

Newbie

Replies 2

Hi Josh,

 

Thanks for getting back to me with that information. I have read it though and I'm still a bit uncertain of which category I fall into, both articles say that tax may need to be withheld but not under which conditions.

 

Should I be talking to ETF management about the return of the tax since that's who the article seemed to be aimed at?

Community Moderator

Replies 1

Hi @chooknet,

 

I would suggest you contact the ETF and work out why they have withheld the amount of tax they have. If it tuns out that there has been a double up because of your residency change you may need to amend you income tax return.

Newbie

Replies 0

Hi Kylie,

So is it true that I shouldn't be taxed on this since I'm a foreign resident?

 

Regards

ATO Community Support

Replies 1

Hi @chooknet

 

Unfranked dividends are taxed unless declared as conduit foreign income. Frank dividends are not taxed.

 

The tax rate is 30% but reduced to 15% if there is a tax treaty between Australia and your country of residence.

 

See another related link on our website Dividends paid or credited to non-residents.

 

Ari

Newbie

Replies 0

Ok, thanks heaps Ari, that clears up a lot!