Becoming A Non-Resident Of Australia For Tax Purposes - Any Disadvantages?

[Litlos]

I did not cancel my private health insurance in Aust as may go back one day (and have my property insurance through HBF). What I did was put it in suspension as no longer in Aust. This was the recommended action from HBF and costs me nothing per annum, but maintains my private health insurance coverage date back to original in case I go back. Hence avoiding the high charges on restarting health insurance.

This thread is bringing out some good information on Aust tax considerations. Anyone else up for asking George about maintaining a pinned topic on Aust tax rules?

Cheers

I suspended my health ins like this many yrs ago and tried to re-instate it a few months ago when returning. they wanted to see a record of my immigration movements- 3 hours waiting at immigration in syd. Then they basically said that because I did not re-instate the insurance the last time I visited oz (2 yrs ago) that I could not simply re-instate the insurance now. all of the waiting periods would be applied to me.

I was more worried about the excess fees on starting private health insurance after a prolonged absence and being considered as never having had private health insurance. I suspect (unconfirmed) that the attitudes to restarting and waiting periods may be related to which private insurer you have. I must do a check on mine now dammit.

Cheers

[samran]

I did not cancel my private health insurance in Aust as may go back one day (and have my property insurance through HBF). What I did was put it in suspension as no longer in Aust. This was the recommended action from HBF and costs me nothing per annum, but maintains my private health insurance coverage date back to original in case I go back. Hence avoiding the high charges on restarting health insurance.

This thread is bringing out some good information on Aust tax considerations. Anyone else up for asking George about maintaining a pinned topic on Aust tax rules?

Cheers

Sort of...

If you've got significant pre-existing conditions which you'll need your private insurance for, then suspending it has you have is a good idea.

However if that doesn't bother you and don't care about waiting 12 months when you return, or, you don't have any significant pre-existing conditions, you might as well let it go.

If you've left Australia all together, your 'life time rating' stays at what it was the date you leave - meaning your premium doesn't go up because of your age. When you come back, you go to immigration, they print out (for free) your passenger movements over the period of time you are away, and they re-instate you at the 'age' you were last on...

http://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/lifetimehealthcover.htm

[Phronesis]

This thread is bringing out some good information on Aust tax considerations. Anyone else up for asking George about maintaining a pinned topic on Aust tax rules?

Unfortunately, most of that information is misguided at best and just plain incorrect at worst.

[Litlos]

This thread is bringing out some good information on Aust tax considerations. Anyone else up for asking George about maintaining a pinned topic on Aust tax rules?

Unfortunately, most of that information is misguided at best and just plain incorrect at worst.

That would be the point of doing a pinned thread for Aussies I think. Way to much misinformation doing the rounds. I basically dislike ATO and the way the information is not clear so they can screw you later. May be we gang up on them and ensure information requests and clarifications are shared for all users benefit?

PS not sure on the to the SMSF question/answer?

Mods - Any ideas?

Cheers

[Phronesis]

This thread is bringing out some good information on Aust tax considerations. Anyone else up for asking George about maintaining a pinned topic on Aust tax rules?

Unfortunately, most of that information is misguided at best and just plain incorrect at worst.

That would be the point of doing a pinned thread for Aussies I think. Way to much misinformation doing the rounds. I basically dislike ATO and the way the information is not clear so they can screw you later. May be we gang up on them and ensure information requests and clarifications are shared for all users benefit?

PS not sure on the to the SMSF question/answer?

Mods - Any ideas?

Cheers

My earlier post on an SMSF is absolutely correct. The other poster is a moron:

What does 'ordinarily in Australia' mean?

We accept the central management and control of your fund is ordinarily in Australia if the SMSF's strategic decisions are regularly made, and high level duties and activities are performed, in Australia.

In some situations, a fund's central management and control may be outside Australia for a period of time. In general, your fund will still meet the 'ordinarily' requirement if its central management and control is temporarily outside Australia for up to two years. If the central management and control of the fund is permanently outside Australia for any period, you will not meet this requirement.

Whether the central management and control of your fund is ordinarily in Australia is based on the fund's circumstances at that time.

Full ATO link here:

http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00145592.htm

[ghworker2010]

I was just back in the nanny state for a month and paid my accountant $100 for his 5min opinion on this exact subject matter. I simply asked him to estimate my tax bill for the end of this fin yr- in both circumstances .... i.e. leaving my tax status as a resident and then as a non resident. As a non resident my tax bill increases nearly 10 fold.

I then decided that I would not change my status to be a non resident !

Moral to story. If you have investments in oz then dont change it otherwise your tax bill increases substantially

I'm no accountant but the problem I see here is ultimately it is the ATO who decide if you are non-resident, which could happen for example if you were ever audited by the ATO.

The link provided earlier is good http://www.ato.gov.au/individuals/content.aspx?doc=/content/64131.htm and I would suggest everyone reads through the table of contents to see what the ATO say constitutes residency. My situation was my accountant was not prepared to continue lodging my returns knowing I had not been living in Australia for a few years. For him it wasn't a case of what was best for me financially, more a case of him being able to justify signing off on my returns if my status was ever questioned by the ATO.

change your accountant- simple solution

[kkerry]

I was just back in the nanny state for a month and paid my accountant $100 for his 5min opinion on this exact subject matter. I simply asked him to estimate my tax bill for the end of this fin yr- in both circumstances .... i.e. leaving my tax status as a resident and then as a non resident. As a non resident my tax bill increases nearly 10 fold.

I then decided that I would not change my status to be a non resident !

Moral to story. If you have investments in oz then dont change it otherwise your tax bill increases substantially

I'm no accountant but the problem I see here is ultimately it is the ATO who decide if you are non-resident, which could happen for example if you were ever audited by the ATO.

The link provided earlier is good http://www.ato.gov.au/individuals/content.aspx?doc=/content/64131.htm and I would suggest everyone reads through the table of contents to see what the ATO say constitutes residency. My situation was my accountant was not prepared to continue lodging my returns knowing I had not been living in Australia for a few years. For him it wasn't a case of what was best for me financially, more a case of him being able to justify signing off on my returns if my status was ever questioned by the ATO.

change your accountant- simple solution

Depends on if you want to be upfront with the tax department or not. Plenty of people clearly are happy to go down whichever path is financially best for them, be it dodgy or otherwise. Maybe they don't have much to lose but I do, so don't want to get audited one day and then hit with a large tax bill or having to fight the ATO from afar with all the costs that involves. His advice to stay legal is fine with me.

[Eesat]

_{I don't know so much about Australia but in the UK it is called non-domiciled for the reason of tax avoidance and it is very,very difficult to get that status.Even if you live out of the UK all your life and pay no taxes,you are still regarded as domiciled there for when it comes to death duties like inheritance tax.
I find it very hard to believe that in Aus it's just a case of declaring yourself non-resident and that's it,I think you'll find you will still be liable for the above death duties all the same!}

[samran]

Australia doesn't operate the dom/non-dom system that works in, and seem almost unique to the UK. Additionally there are no death taxes.

Proving residency comes down to a number of tests which have been explored already.

[Litlos]

There is a "Tool" in the ATO website that gives an indication of your residency status:

http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=Resident.XR4&go=ok

Of course there are the usual wriggle words from the ATO. I says right at the bottom to print out a copy of the "Basis of Decision". Whilst the ATO can probably change their mind at any point by having this as saying non resident would (should) help avoid penalties on the basis of actions of a "Reasonable Man" in following advice given in good faith.

If you are curious why this would be a defence then google "reasonable man tort Australia" . Is a very handy bit of basic law to know, but only applies as far as I am aware to legal systems derived from English common law, so Thailand is out.

Cheers