Any Australians here that are non residents for taxation purposes but still retain a bank account in Oz

[Adumbration]

I have been out of Australia for more than a decade now but have maintained my tax residency there.  

 

During that time my tax was submitted each year by the same accountant.  

 

This guy also checks a post box that I maintained in Australia.

 

A few months back he went offgrid and failed to respond to my emails relating to my mail and my tax return for this year.

 

I read online that he had sold his practice, and not advised me.  I called the incoming buyer of his practice and they had no record of me as his client.

 

I had to do my own return and post it to the ATO because of the time frame.  It is likely when they receive it they well deem me a non resident for tax purposes.

 

Are there any ozzies here that are non tax residents back home but still retain their bank account back there?

 

If yes, what bank are you using?

Edited October 22, 2021 by Adumbration

[Will27]

What did you declare yourself as on your tax return?

Our system is based on self assessment, so if you declared yourself as a resident, it will be accepted.

 

Like most Aussies on here, you're probably a non-resident for tax purposes but what you declare yourself as is up to you.

 

The residency versus non-residency has been done to death on here.

 

I'm not sure how being a non-resident has anything to do with your bank account either.

 

Anyway, IMO, best to try and fly under the radar with anything to do with the ATO.

[Lemsta69]

7 minutes ago, Will27 said:

What did you declare yourself as on your tax return?

Our system is based on self assessment, so if you declared yourself as a resident, it will be accepted.

 

Like most Aussies on here, you're probably a non-resident for tax purposes but what you declare yourself as is up to you.

 

The residency versus non-residency has been done to death on here.

 

I'm not sure how being a non-resident has anything to do with your bank account either.

 

Anyway, IMO, best to try and fly under the radar with anything to do with the ATO.

I'm looking to become non-resident for tax purposes after I move to Thailand in late November. my understanding is that it's not simply a matter of declaring oneself non-resident, you have to show that you've 'cut connection' to Australia.

 

this apparently entails all sorts of actions like cancelling credit cards, closing bank accounts, advising Medicare, Centrelink & AEC that you're leaving Australia permanently. getting a 'permanent abode' in your destination, ie. you can't be a nomad. this is supposedly on top of the 183 days out of country or whatever the period is. 

 

you also have to pay 'exit tax' on your assets. something about 'deemed disposal'.

 

all of which I'm not particularly looking forward to. but I'll try and look up these other posts you mention to see what they've got to say about it.

[Will27]

22 minutes ago, Lemsta69 said:

I'm looking to become non-resident for tax purposes after I move to Thailand in late November. my understanding is that it's not simply a matter of declaring oneself non-resident, you have to show that you've 'cut connection' to Australia.

 

this apparently entails all sorts of actions like cancelling credit cards, closing bank accounts, advising Medicare, Centrelink & AEC that you're leaving Australia permanently. getting a 'permanent abode' in your destination, ie. you can't be a nomad. this is supposedly on top of the 183 days out of country or whatever the period is. 

 

you also have to pay 'exit tax' on your assets. something about 'deemed disposal'.

 

all of which I'm not particularly looking forward to. but I'll try and look up these other posts you mention to see what they've got to say about it.

I was asking why the OP would suddenly be assessed as a non-resident.

 

I'm not sure where you sourced your information from (not saying you're incorrect BTW), but my understanding was you either ticked the resident or non-resident box and then you get taxed accordingly.

[Lemsta69]

30 minutes ago, Will27 said:

I was asking why the OP would suddenly be assessed as a non-resident.

 

I'm not sure where you sourced your information from (not saying you're incorrect BTW), but my understanding was you either ticked the resident or non-resident box and then you get taxed accordingly.

hi mate, yes i understand what you were asking Adumbration. but i thought i'd add the additional info just in case.  i originally found this info on the website noted below. it has subsequently been confirmed to me by my accountant. he's a Chartered Accountant and has no affiliation with expattaxes, nor do I.

 

https://www.expattaxes.com.au/15-ways-to-lose-australian-tax-residency-status/

Edited October 23, 2021 by Lemsta69
typo

[Lemsta69]

@olmate bloody oath it's confusing, it's making my head spin! at least it's not as bad as what the Septics have to put up with, what with FATCA and FBAR etc etc

[Olmate]

2 minutes ago, Lemsta69 said:

@olmate bloody oath it's confusing, it's making my head spin! at least it's not as bad as what the Septics have to put up with, what with FATCA and FBAR etc etc

Must be a great reason why u want to.Care to share? 

[Lemsta69]

Just now, Olmate said:

Must be a great reason why u want to.Care to share? 

I'm not interested in paying tax at the top marginal rate of close to fifty percent if I'm no longer living in Australia. I don't have a problem with the concept of tax, but it's a bit hard to swallow the high rates when the top end of town are getting away with murder so to speak.

[Will27]

8 minutes ago, Lemsta69 said:

hi mate, yes i understand what you were asking the Adumbration. but i thought i'd add the additional info just in case.  i originally found this info on the website noted below. it has subsequently been confirmed to me by my accountant. he's a Chartered Accountant and has no affiliation with expattaxes, nor do I.

 

https://www.expattaxes.com.au/15-ways-to-lose-australian-tax-residency-status/

The website you mentioned seems to be for people who want to claim non-residency for tax benefits.

 

From what I've read on here, most of the Aussies would be non-residents but claim residency due to getting slaughtered

by the non-resident tax rates.

 

The whole residency thing isn't just based on days in Oz etc.

 

Like I said, it's best to fly under the radar.

[Lemsta69]

6 minutes ago, Will27 said:

The website you mentioned seems to be for people who want to claim non-residency for tax benefits.

 

From what I've read on here, most of the Aussies would be non-residents but claim residency due to getting slaughtered

by the non-resident tax rates.

 

The whole residency thing isn't just based on days in Oz etc.

 

Like I said, it's best to fly under the radar.

hi Will, thanks for the insight and that makes sense now. I just assumed everybody who leaves Australia wants to move their assets offshore to a tax haven ????

[Bvor]

apparently the ATO is setting up cross referencing procedures to tax the age pension income of non residents at the foreign resident rate of 32.5 cents per dollar. apologies for not having a link. the matter has been raised on farangs stuck in australia forum and looks the real deal. 

[dinga]

In answer to the OP's simple question:

 

*  Yes - I am a Non-Resident for tax purposes, and have maintained a number of bank (and TD) accounts over the years - main one being with CBA.  For all accounts, recorded as Non-Resident, with a Thai address and any interest is subject to deduction of final (withholding) tax

[Will27]

1 hour ago, Bvor said:

apparently the ATO is setting up cross referencing procedures to tax the age pension income of non residents at the foreign resident rate of 32.5 cents per dollar. apologies for not having a link. the matter has been raised on farangs stuck in australia forum and looks the real deal. 

I'll believe that when I see it.

 

The ATO would get slaughtered if they targeted pensioners IMO.

[Bvor]

1 hour ago, Will27 said:

I'll believe that when I see it.

 

The ATO would get slaughtered if they targeted pensioners IMO.

correction - the matter was raised on australians in thailand forum. glen shkolar was the member who provided the info. apparently the proposal to be effective from 1/7/21 is yet to be passed in the senate. spending of oz pension overseas by non residents does rile some residents (not me). wait and see as you say. 

[Adumbration]

On 10/23/2021 at 10:44 AM, dinga said:

In answer to the OP's simple question:

 

*  Yes - I am a Non-Resident for tax purposes, and have maintained a number of bank (and TD) accounts over the years - main one being with CBA.  For all accounts, recorded as Non-Resident, with a Thai address and any interest is subject to deduction of final (withholding) tax

Thanks dinga for your pellucid input.

 

I have been with CBA since I was 12 back when banking with the Wales from my school money box. I also had a trading account with Commsec since they kicked off.

 

A few weeks back there was a small administrative problem (that arose from an oversight on commsecs behalf).  There was a $10 cheque floating around in the name of my long since wound up Australian company.  They emailed me and asked me to call them.  I replied saying that they can call me because the the 1300 and 1800 numbers dont work from here I gave them my number here.

 

Some young lad with very poor English then called me a few days later and said that my trading account is now suspended because I was overseas.

 

I lodged a complaint (spent another two weeks playing email tennis with another person who appeared to have English as his second language) then got a decisions final email.

 

So I appreciate that if non resident tax on bank interest in 10%.  No problem given there is currently 0% interest.  But what do you do with your shareholdings?  

 

I note that it is not just Commsec but all other Aussie brokerage houses have requirement person must reside in Australia.

[starky]

On 10/23/2021 at 9:21 AM, Lemsta69 said:

I'm looking to become non-resident for tax purposes after I move to Thailand in late November. my understanding is that it's not simply a matter of declaring oneself non-resident, you have to show that you've 'cut connection' to Australia.

 

this apparently entails all sorts of actions like cancelling credit cards, closing bank accounts, advising Medicare, Centrelink & AEC that you're leaving Australia permanently. getting a 'permanent abode' in your destination, ie. you can't be a nomad. this is supposedly on top of the 183 days out of country or whatever the period is. 

 

you also have to pay 'exit tax' on your assets. something about 'deemed disposal'.

 

all of which I'm not particularly looking forward to. but I'll try and look up these other posts you mention to see what they've got to say about it.

Why would you want to do all that?

[Lemsta69]

1 hour ago, starky said:

Why would you want to do all that?

so I don't have to pay tax ever again ????

[KhunHeineken]

On 12/24/2021 at 5:40 PM, Lemsta69 said:

so I don't have to pay tax ever again ????

If you don't want to pay tax in Australia, then have nothing in Australia than can be taxed.  

 

Sell all your assets, and move all the proceeds offshore.  A bank based in Singapore is a good option.  

 

You can have a credit card with an Australian finance company, as well as a pre paid or even post paid sim card, a bank account (with next to nothing in it) and a driver's license.  None of these attract tax, and can be used by you either outside of Australia, or inside Australia. 

 

Obviously, you will have an Aussie passport as well.  

[Lemsta69]

3 hours ago, KhunHeineken said:

If you don't want to pay tax in Australia, then have nothing in Australia than can be taxed.  

 

Sell all your assets, and move all the proceeds offshore.  A bank based in Singapore is a good option.  

 

You can have a credit card with an Australian finance company, as well as a pre paid or even post paid sim card, a bank account (with next to nothing in it) and a driver's license.  None of these attract tax, and can be used by you either outside of Australia, or inside Australia. 

 

Obviously, you will have an Aussie passport as well.  

thanks mate, good advice. I've done most of what your outlined but I still think I'll ditch the Aussie credit card just to be on the safe side. also I've got a crypto.com visa debit card that gives me 5% cashback on most purchases and I prefer to use that where it's accepted.

[KhunHeineken]

On 12/30/2021 at 5:14 PM, Lemsta69 said:

thanks mate, good advice. I've done most of what your outlined but I still think I'll ditch the Aussie credit card just to be on the safe side. also I've got a crypto.com visa debit card that gives me 5% cashback on most purchases and I prefer to use that where it's accepted.

 

Checking out of Australia is not the best solution for everyone.  I haven't done it as yet, but I know a lot of guys who have.  I envy them. 

 

They must sleep well knowing they have rid themselves of the Australian Tax Office forever.  ????    

[1]

As others as mentioned it's a complete mind field. But there is currently recommendations from the board of taxation looking to put forward new legislation to simplify the question of tax residency. I'm not sure of the exact stage it's at but here is a article talking more about it.

 

https://www.mondaq.com/australia/income-tax/1109524/proposed-changes-to-the-tax-residency-provisions-for-individuals-explained

 

From mine I'm more interested in maintaining my tax residency. Which I'm hoping like that that has already been suggested here, flying under the radar is the way to go. My mate who had 20 years at the ATO seems to think they're usually not really interested in your average retiree. But he hasn't been at the ATO now for over 20 years. Though really it would be fairly easy to believe, again as mentioned already, that if you say you're a tax resident, you're a tax resident. Really a lot of this stuff is to do with the tax treaty they have with Thailand I believe.

 

Anyway here is a YouTube channel that has a lot of good information, probably more from the position of getting rid of your Australian tax residency. But it's always worth understanding both sides to get good information about this incredibly complex situation.

 

https://youtu.be/UwHkf7sLF7M

 

But just to sum up from everything I've learnt from my time researching the only thing I have found that is concrete to determine your position is getting a ruling from the tax office. Not an exercise I'm interested in because I'm not confident of the result.

[KhunHeineken]

8 hours ago, 1 said:

As others as mentioned it's a complete mind field. But there is currently recommendations from the board of taxation looking to put forward new legislation to simplify the question of tax residency. I'm not sure of the exact stage it's at but here is a article talking more about it.

I wouldn't hold my breath.

 

This guy was commissioned to review taxation and make recommendation a long time ago.  Very little of any substance has been implemented.

 

That said, the simplest thing for the government to do is just make it the 183 days outside of Australia.  That would net billions of dollars, or force thousands to return to Australia's economy.

 

https://www.abc.net.au/news/2019-12-23/henry-tax-review-ten-years-on/11817328

 

8 hours ago, 1 said:

My mate who had 20 years at the ATO seems to think they're usually not really interested in your average retiree. But he hasn't been at the ATO now for over 20 years. Though really it would be fairly easy to believe, again as mentioned already, that if you say you're a tax resident, you're a tax resident.

Whilst they are not interested in the average retiree, they are interested in their money, and taxing thousands of expat retirees at non resident rates will amount to hundreds of millions of dollars, and it's so easy to do because the immigration data base shows you are outside of Australia for 183 days, so you will be sent a please explain letter.  

 

Put simply, the government doesn't want you earning in Australia, but spending overseas. 

 

8 hours ago, 1 said:

Though really it would be fairly easy to believe, again as mentioned already, that if you say you're a tax resident, you're a tax resident.

No, it's not that simple. If it was, we would all have nothing to be concerned about.

 

8 hours ago, 1 said:

But just to sum up from everything I've learnt from my time researching the only thing I have found that is concrete to determine your position is getting a ruling from the tax office. Not an exercise I'm interested in because I'm not confident of the result.

Don't go to the tax office, let the tax office come to you, but be well prepared for when they do, because there is a likelihood that they will at some time in the not so distant future.  

 

[HAPPYNUFF]

I  declared myself a non resident when I departed Oz.     the only assets I now have there  is  my bank account, , my superannuation fund  and   shares in Australian public companies.    

Interest  earned on my bank account is taxed at 10%.      Dividend earnings pay me   a fully franked sum,  that is   tax  has been deducted at the company rate of 30% prior to me receiving  dividends.     That   30%  is     kept by the government.   Were  I   still an Oz resident, I would be able to reclaim that  monies back  on my annual  Income Tax return.

In short, if  your are non resident,  the tax rate applicable  is  10%  on  any bank interest, and 30% on all other earnings,  franked or unfranked  shares,   rental income   etc...     For those   live  overseas  and   sometimes, or pehaps never return to Oz   and do not declare   their non resident status, simply because they may  retain an Oz bank account, or own and rent out a property etc, I fear they live in jeopardy,  the  Taxation  Department  may assess you as non resident at any time, and will take steps to recoup  any  unpaid tax  they deem you owe,  even if that means placing a garnishy order on  any  accounts, shares or property you retain in Oz.  It has happened  numerous times past.    It is simply not worth the risk..   This   idea  that a 6 month  absence each year is sufficient is simply untrue.     This info has been given to me by  my nephew , who, sad to say, is an investigator with the Australian Tax office.

[tlcwaterfall]

On 2/14/2022 at 1:12 PM, HAPPYNUFF said:

I  declared myself a non resident when I departed Oz.     the only assets I now have there  is  my bank account, , my superannuation fund  and   shares in Australian public companies.    

Interest  earned on my bank account is taxed at 10%.      Dividend earnings pay me   a fully franked sum,  that is   tax  has been deducted at the company rate of 30% prior to me receiving  dividends.     That   30%  is     kept by the government.   Were  I   still an Oz resident, I would be able to reclaim that  monies back  on my annual  Income Tax return.

In short, if  your are non resident,  the tax rate applicable  is  10%  on  any bank interest, and 30% on all other earnings,  franked or unfranked  shares,   rental income   etc...     For those   live  overseas  and   sometimes, or pehaps never return to Oz   and do not declare   their non resident status, simply because they may  retain an Oz bank account, or own and rent out a property etc, I fear they live in jeopardy,  the  Taxation  Department  may assess you as non resident at any time, and will take steps to recoup  any  unpaid tax  they deem you owe,  even if that means placing a garnishy order on  any  accounts, shares or property you retain in Oz.  It has happened  numerous times past.    It is simply not worth the risk..   This   idea  that a 6 month  absence each year is sufficient is simply untrue.     This info has been given to me by  my nephew , who, sad to say, is an investigator with the Australian Tax office.

Current issues and changes to individual tax residency rules (holdingredlich.com)

 

This may assist. My understanding is if you spend 183 days each year in Australia you will be fine.

 

You will keep your Australian tax residency.

[KhunHeineken]

On 3/5/2022 at 2:36 PM, tlcwaterfall said:

Current issues and changes to individual tax residency rules (holdingredlich.com)

 

This may assist. My understanding is if you spend 183 days each year in Australia you will be fine.

 

You will keep your Australian tax residency.

The 183 day rule goes both ways.  Stay in Australia 6 months of the year and you will be fine, stay outside of Australia for more than 6 months of the year and you have exposed yourself to the ATO for at minimum, a please explain, to at worse, a tax bill at the non-resident rate, from dollar zero.  

 

Who wants to spend 6 months of the year, every year, in Australia?  Who can afford to pay non-resident tax rates, and who would pay, on principle?  

 

Most have been flying under the ATO radar for the last several years, including myself, but as I previously posted, I have always had the feeling the day was coming when the ATO starts chasing money from expat retirees by declaring them non-residents for taxation purposes.

 

I have been relying on the domicile test should they go after me, but an adjustment to the 183 day rule, making it override the other tests, could make things very difficult or expensive.   

 

Given Australia has record debt, the ATO will be chasing every dollar they can, from everyone they can, and being outside of Australia for 183 days of the year makes expat retirees an easy target. I hope I'm wrong, but only time will tell.   

 

If, or when, that day comes, the only options I see for myself is staying 6 months in Australia, or selling up everything and moving the cash offshore and having nothing in Australia that can be taxed.  

 

I had a look at your link, and when I read things like below, I think I can see the writing on the wall for the future.  It reads to me, stay inside Australia for 183 days, no problem.  Stay outside of Australia 183 days, and here's your non-resident tax bill. 

 

"The proposed stage one test (being the primary test) is based on physical presence in Australia and will be a ‘bright line test’ – that is, a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident."

Edited March 7, 2022 by KhunHeineken

[tlcwaterfall]

56 minutes ago, KhunHeineken said:

The 183 day rule goes both ways.  Stay in Australia 6 months of the year and you will be fine, stay outside of Australia for more than 6 months of the year and you have exposed yourself to the ATO for at minimum, a please explain, to at worse, a tax bill at the non-resident rate, from dollar zero.  

 

Who wants to spend 6 months of the year, every year, in Australia?  Who can afford to pay non-resident tax rates, and who would pay, on principle?  

 

Most have been flying under the ATO radar for the last several years, including myself, but as I previously posted, I have always had the feeling the day was coming when the ATO starts chasing money from expat retirees by declaring them non-residents for taxation purposes.

 

I have been relying on the domicile test should they go after me, but an adjustment to the 183 day rule, making it override the other tests, could make things very difficult or expensive.   

 

Given Australia has record debt, the ATO will be chasing every dollar they can, from everyone they can, and being outside of Australia for 183 days of the year makes expat retirees an easy target. I hope I'm wrong, but only time will tell.   

 

If, or when, that day comes, the only options I see for myself is staying 6 months in Australia, or selling up everything and moving the cash offshore and having nothing in Australia that can be taxed.  

 

I had a look at your link, and when I read things like below, I think I can see the writing on the wall for the future.  It reads to me, stay inside Australia for 183 days, no problem.  Stay outside of Australia 183 days, and here's your non-resident tax bill. 

 

"The proposed stage one test (being the primary test) is based on physical presence in Australia and will be a ‘bright line test’ – that is, a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident."

Further information.

 

Taxing times for Australian expats overseas | HLB Mann Judd

 

 

 

[KhunHeineken]

On 3/7/2022 at 12:54 PM, tlcwaterfall said:

Further information.

 

Taxing times for Australian expats overseas | HLB Mann Judd

 

 

 

There it is again, the 183 day rule becoming the primary test, and stricter.

 

"The most significant change is that a stricter 183-day “primary” test would replace the existing one, which would mean that if someone is in Australia for at least 183 days in a year they would always be treated as a tax resident."

 

It clearly says if you are inside of Australia for 183 days, you will be treated as a tax resident.  However, that leads me to believe that in the near future when these changes come in, if you are outside of Australia for 183 days of the year, you will be treated as a non-resident, and that is going to hurt many expat retirees, with some not being able to afford to be classified a non-resident for tax purposes.  

 

 

[Artisi]

On 10/23/2021 at 12:23 PM, Will27 said:

I'll believe that when I see it.

 

The ATO would get slaughtered if they targeted pensioners IMO.

Sorry, the ATO don't give a preverbial flying xxxx for what any overseas Aussie pensioner thinks / wants / believes. 

[Will27]

2 hours ago, Artisi said:

Sorry, the ATO don't give a preverbial flying xxxx for what any overseas Aussie pensioner thinks / wants / believes. 

I'm talking about all pensioners.

Not just the ones living overseas.

[Artisi]

13 minutes ago, Will27 said:

I'm talking about all pensioners.

Not just the ones living overseas.

When I checked the subject  was about non residents.