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Transferring savings from overseas and tax implications

Newbie

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Replies 3

Hi, 

I need some help here. 

My wife and I are planning to buy our first home. For the initial deposit, we wanted to transfer our past savings from overseas to Australia. For some reason, our overseas bank executive says that it would be easy if I transferred from my overseas account to my wife's Australian account and my wife transfers money from her overseas account to mine in Australia. Can someone please tell me if this would be okay? We were advised that if we need to transfer between our own accounts, we would need to change our overseas bank accounts from "savings" to "non-resident" which takes quite some time and lot of paperwork. 

 

Thanks in advance 

 

Regards       

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Certified Response

Community Support

Replies 0

Hi @sant37,

 

Welcome to our Community!

 

We can provide you with general information here on our Community, however we can't advise which account it would be best to transfer your overseas money into as this may be considered financial advice.

 

Generally, if you're an Australian resident for tax purposes and you transfer money from an overseas bank account to an Australian bank account isn't considered as income and you won’t need to pay tax on the transfer. However, any interest you earn on the money in your Australian bank account will need to be reported in your tax return for the relevant year.

 

If you have further questions, you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

3 REPLIES 3

Taxicorn

Replies 2

You can transfer your savings anywhere that you want.

The only advantage of doing what you said would be based on any tax that would be payable on interest earned.

 

If you are both are Australian Residents for tax purposes you will be both be taxed individually on your total taxable income, so if yours (before inclusion of tax from interest) was higher than your wifes then it would make sense for you to have the less amount of interest. Also if Australian for tax purposes then any interest earned before closing will be added to your australian taxable income.

 

Like I said, you can transfer it all to yor wifes, all to yours, split it, do what you want.

But at tax time any accounts with your name on will have the interest added to your taxable income either 100% if just in your name or 50% if in joint names.

 

You need to have some idea of what both of your individual taxable income will be and then plan accordingly.

 

Are you planning on completely closig down the overseas accounts?

 

Newbie

Replies 1

Dear macfanboy,

 

Thanks for replying, the information you provided is really helpful. The only reason for us to transfer the funds that way is that we do not have another option. I just wanted to be aware if we would have any tax implications. My wife and I are Australian residents for tax purposes but we wouldn't be earning any interest on the transferred funds as they would directly go towards the deposit for our first home. 

 

However, to be on the safer side I will get all the funds transferred to my wife's account as her individual taxable income is significantly less than mine.  

Most helpful response

ATO Certified Response

Community Support

Replies 0

Hi @sant37,

 

Welcome to our Community!

 

We can provide you with general information here on our Community, however we can't advise which account it would be best to transfer your overseas money into as this may be considered financial advice.

 

Generally, if you're an Australian resident for tax purposes and you transfer money from an overseas bank account to an Australian bank account isn't considered as income and you won’t need to pay tax on the transfer. However, any interest you earn on the money in your Australian bank account will need to be reported in your tax return for the relevant year.

 

If you have further questions, you can phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.