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Transferring savings from overseas

I'm new

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Hi there, 

I've been living in Australia since the last three years. I've got some savings (from income earned while I was living in another country prior to moving to Australia) in an overseas bank account. I would like to close down the said overseas account and transfer the funds to Australia. What are the tax implications of doing this? Is there a limit on the amount I can transfer in this manner? I understand once the funds are transferred, I will be required to pay tax on the income earned (interest income) from those funds. 

Thank you very much for your help. 

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Most helpful response

ATO Certified Response

Former Community Support

Replies 2

Hi @LunaL and @peecee,

 

Thanks for posting! Generally speaking, if you're transferring money from one personal bank account to another, it isn't considered to be income for income tax purposes. In this scenario, you've earned the income while you weren't a resident for tax purposes, so Australian income tax rules don't apply. @LunaL is right - any interest you earn (including while the money is in an overseas account) needs to be reported on your tax return once you become a resident for tax purposes.

If your situation is different (for example, the money might be considered to be a 'gift' from someone else), you may need to contact our early engagement team to discuss your particular circumstances.

 

We would encourage you to contact your financial institution to see what (if any) fees may apply, and to also check with the Department of Home Affairs to find out whether customs duties will need to be paid (especially where you'll be transferring a lot of money).

 

Thanks!

4 REPLIES 4

I'm new

Replies 0

Thanks for asking this question as I also have the same issue and I am about to transfer some money back from the UK. I have been scouring the ATO website and it's hard to find a definitive answer on this. In my case I have greater than $250k which possibly affects the tax implication. Thanks to anyone who can answer this question! 


@LunaLwrote:

Hi there, 

I've been living in Australia since the last three years. I've got some savings (from income earned while I was living in another country prior to moving to Australia) in an overseas bank account. I would like to close down the said overseas account and transfer the funds to Australia. What are the tax implications of doing this? Is there a limit on the amount I can transfer in this manner? I understand once the funds are transferred, I will be required to pay tax on the income earned (interest income) from those funds. 

Thank you very much for your help. 


 

Most helpful response

ATO Certified Response

Former Community Support

Replies 2

Hi @LunaL and @peecee,

 

Thanks for posting! Generally speaking, if you're transferring money from one personal bank account to another, it isn't considered to be income for income tax purposes. In this scenario, you've earned the income while you weren't a resident for tax purposes, so Australian income tax rules don't apply. @LunaL is right - any interest you earn (including while the money is in an overseas account) needs to be reported on your tax return once you become a resident for tax purposes.

If your situation is different (for example, the money might be considered to be a 'gift' from someone else), you may need to contact our early engagement team to discuss your particular circumstances.

 

We would encourage you to contact your financial institution to see what (if any) fees may apply, and to also check with the Department of Home Affairs to find out whether customs duties will need to be paid (especially where you'll be transferring a lot of money).

 

Thanks!

Newbie

Replies 1

Hi Amanda,

 

I was just wondering if you could give me an offical link explaining that the cash in bank accounts isn't taxable if the interest has been declared on both a US and Aus tax return. 

 

Thanks!

Former Community Support

Replies 0

Hi @SLS,

 

Thanks for following up! The answers we've provided on this thread are for very general situations - where people are bring smaller amounts of money from overseas bank accounts into Australia.

 

However, if people are exchanging currencies between bank accounts in order to make a profit, or bringing over large sums of money,different rules relating to foreign exchange can apply - have a look at the answer we provided to @Kyber over on Overseas Saving Bank account with Foreign Currency.

 

If you'd like written advice that's specific to your situation, you can ask us for a private ruling. They're a free service where we explain how we think tax law applies to your circumstances - download the private ruling application form from our website.

 

Thanks!