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WHV / Sole Trader / Residency Status

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Hi there, 

 

I would like to confirm the tax rates I can expect to pay over the next few years with regards to my situation as follows:

 

- Arrived in Australia Feb 2019 on a WHV class 417

- Currently being taxed 15% WHV rate for a casual job 

- Set up a sole trader business due to begin trading Sept 2019, will cease my other job soon after I begin trading and drawing a profit 

- In process of submitting application for partner visa here (have been with my Australian partner for over 10 years)

- Once I submit application for the partner visa, looking at the IMMI website it appears I will remain on my WHV (and subsequently the WHV tax rates) until that "substantive visa" expires (Feb 2020).

- Then I will switch onto a bridging visa until my partner visa is approved (current processing times 22-26 months), during this time I understand I will still be on WHV tax rates? Is this correct?

 

From the above, it looks as though I (and subsequently my sole trader business) will be on WHV tax rates for probably my first 3 years in Australia. FYI I would consider myself an Australian resident for tax purposes (see below for reasons*), so I'm not sure if this affects the tax rates that apply over that timeframe?

 

Thanks in advance! 

 

Jennie 

 

*I have declared myself non-resident in the UK, I have shipped all my possessions here, I have set up a business here, I have closed the majority of my UK bank accounts, my partner is applying to do his medical specialty training programme here in Australia (minimum 7 years here to complete full training)

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Hi @jennie_ed,

 

Thanks for your question!

 

Generally speaking, it doesn't matter too much what your visa status is, but rather your reason for being in Australia.

 

If you have arrived here on a 417 visa but have taken steps to make Australia your permanent home, then it is likely that you will be considered an Australian resident from the moment you arrived. You can read more about residency for tax purposes on our website, and view the residency tests here. We also have some scenarios that you may find helpful here.  

 

If you determine that you are a resident for tax purposes, you should let your employer know so that they can make the appropriate adjustments to their systems. You will be liable for the Medicare levy as an Australian resident, and may be eligible for the tax free threshold.

 

When you complete your tax return, you can advise that you were a resident for tax purposes. You will still need to indicate any of your  employment income that was received whilst on a WHM visa (until your visa class changes) and we will calculate the rest for you based on your residency status.

 

I hope this helps,

 

Rachael B.

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Hi @jennie_ed,

 

Thanks for your question!

 

Generally speaking, it doesn't matter too much what your visa status is, but rather your reason for being in Australia.

 

If you have arrived here on a 417 visa but have taken steps to make Australia your permanent home, then it is likely that you will be considered an Australian resident from the moment you arrived. You can read more about residency for tax purposes on our website, and view the residency tests here. We also have some scenarios that you may find helpful here.  

 

If you determine that you are a resident for tax purposes, you should let your employer know so that they can make the appropriate adjustments to their systems. You will be liable for the Medicare levy as an Australian resident, and may be eligible for the tax free threshold.

 

When you complete your tax return, you can advise that you were a resident for tax purposes. You will still need to indicate any of your  employment income that was received whilst on a WHM visa (until your visa class changes) and we will calculate the rest for you based on your residency status.

 

I hope this helps,

 

Rachael B.