Frequently Asked Questions

Individuals

1. How do I obtain an Australian Tax File Number?

2. Do I pay tax in Australia on my UK source income when I move to Australia, if I don’t bring it to Australia? 

3. Do I pay tax in Australia on income from my UK investments? (i.e.: Endowments/PEPs/TESSAs/ISAs)

4. Does the type of visa I hold affect my tax position?

5. When is the end of the tax year in Australia?

6. Do I have to complete a Tax Return in Australia?

7. Are you a Registered Tax Agent?

8. In the year I leave the UK am I entitled to a tax refund?

9. How do I claim a tax refund when I leave the UK?

10. What happens if I leave property in the UK when I move to Australia?

11. What happens if I decide to rent out a property in the UK when I move to Australia?

12. How is my pension income taxed when I move to Australia?

13. Can your Australian office assist with the preparation of my UK Tax Return?

14. Am I taxed on monies I bring into Australia at the time I move to Australia?

15. Does Australia have death duties?

Businesses

16. How do I register a business in Australia?

17. What about registering for other taxes?

18. Are there any additional payroll costs in Australia?

19. What are our compliance obligations if we set up a business in Australia?

20. To what date are we required to prepare our accounts in Australia? What is our accounting reference date in Australia?

21. Can you help us set up and register our business in Australia?


Individuals

Q.   How do I obtain an Australian Tax File Number?

A.   A Tax File Number can be obtained online once you are physically in Australia, and can be applied for at the Australian Tax Office website, www.ato.gov.au

Q.   Do I pay tax in Australia on my UK source income when I move to Australia, if I don’t bring it to Australia?

A.   As an Australian tax resident you are subject to Australian tax on worldwide income wherever it is earned or paid, unless you have a temporary residency visa.

Q.   Do I pay tax in Australia on income from my UK investments? (i.e.: Endowments/PEPs/TESSAs/ISAs)

A.   Unless you are living in Australia as the holder of a temporary residency visa yes, you can expect that Australia will tax the income earned with all these types of investments.

Be careful – income may be tax free in the UK but it is generally NOT tax free in Australia.

Q.   Does the type of visa I hold affect my tax position?

A.   Temporary resident tax measures were introduced in Australia with effect from 1 July 2006. Individuals who qualify as “temporary residents” are exempt from Australian tax on certain foreign source income and capital gains.

If you are a temporary visaholder you should discuss your situation with an experienced tax advisor, as many tax practitioners are not familiar with the various types of Australian visa.

Q.   When is the end of the tax year in Australia?

A.   The 30th of June.

Q.   Do I have to complete a Tax Return in Australia?

A.   Yes, almost all individuals in Australia are required to complete and lodge a Tax Return.

Tax Returns are to be submitted to the Australian Taxation Office by 31st October following the end of the tax year, unless a Registered Tax Agent is engaged. Tax Agents are permitted to submit tax returns for clients for several months beyond the 31st October deadline.

Q.   Are you a Registered Tax Agent?

A.   Yes, we are. Our agent number is 5153 1008.

Q.   In the year I leave the UK am I entitled to a tax refund?

A.   Depending on the date of your departure most individuals are entitled to a refund of UK tax (assuming you have paid tax throughout the year). A refund arises because you are entitled to UK personal allowances for the full year, even though you have only been resident in the UK for a part year.

Q.   How do I claim a tax refund when I leave the UK?

A.   Complete a form P85 and send this to HM Revenue and Customs in the UK with the P45 from your last employer. This form can be sent to HM Revenue after you have moved to Australia.

Q.   What happens if I leave property in the UK when I move to Australia?

A.   You may have a liability to capital gains tax in Australia upon its eventual sale – obtain a market valuation of the property at the date of your arrival in Australia. This valuation will be your cost base for Australian capital gains tax purposes and will be the reference point from which any capital gain or loss is computed.

There are exemptions from this general rule though – you should discuss your situation with an experienced tax advisor.

Q.   What happens if I decide to rent out a property in the UK when I move to Australia?

A.   You will probably have to complete a UK Tax Return and report the rental income received less any expenses for the tax period 6 April to the following 5 April, and pay UK tax accordingly.

You should also complete and submit a UK Revenue form NRL1 in your capacity as a non-UK resident landlord.

In addition, as an Australian tax resident you will need to report the rental income received less any expenses for the financial year 1 July (or the date you become a tax resident of Australia if later) to the following 30 June on your Australian tax return and pay any Australian taxes due (reduced by any UK tax paid on the same income), unless you have a temporary residency visa.

Q.   How is my pension income taxed when I move to Australia?

A.   If you are moving to Australia and are an Australian citizen or permanent visaholder UK source pension income is wholly taxable in Australia under the provisions of the Tax Treaty between the two countries.

The relevant HM Revenue form should be completed and stamped by the Australian Taxation Office as soon as possible following arrival to live in Australia.

If you move to Australia and hold a temporary residency visa your UK pension income remains taxable in the UK, and is not taxable in Australia.

Q.   Can your Australian office assist with the preparation of my UK Tax Return?

A.   Yes, this is one of our main services to clients in Australia. We prepare UK tax returns in Australia and electronically lodge them with HM Revenue using tax return software.

Q.   Am I taxed on monies I bring into Australia at the time I move to Australia?

A.   In most cases no. However, if you leave funds overseas waiting for the rate of exchange to improve, the gain/loss arising from the date of your  tax residency to the date the monies are received in Australia might be assessable/deductible in Australia.

Q.   Does Australia have death duties?

A.   No, there are no death duties in Australia. However, as a UK domiciled individual you may be caught by Inheritance Tax in the UK on your worldwide sited assets. (Professional advice is recommended to avoid paying unnecessary taxes).

Businesses

Q.   How do I register a business in Australia?

A.   The registration process you are required to follow will depend on the type of business you are registering in Australia. For example, an Australian limited company must be incorporated with the company regulator, the Australian Securities and Investments Commission, as a result of which an Australian Company Number will be issued. You would then register for an Australian Business Number with the Australian Taxation Office.

By contrast, an Australian branch of an overseas business would apply to ASIC for an Australian Registered Body Number, and would then apply for an ABN.

Q.   What about registering for other taxes?

A.   Businesses that are setting up in Australia would also usually seek registration for Australia’s Goods and Services Tax (broadly equivalent to VAT in the UK, but levied at the rate of 10%) and Pay As You Go Withholding (similar to PAYE in the UK).

Registration for the GST and PAYG is administered by the Australian Taxation Office, and is usually applied for at the same time as the ABN registration.

Q.   Are there any additional payroll costs in Australia?

A.   As a general rule employers in Australia are required to contribute 9% of salary into each employee’s chosen superannuation fund. This is payable on a quarterly basis.

Subject to the level of total annual payroll there may also be an obligation to account for payroll tax to the State or Territory Government in which employees are working.

Q.   What are our compliance obligations if we set up a business in Australia?

A.   As a general rule you can anticipate being required to prepare a return every 3 months called a Business Activity Statement, which brings together details of GST on sales and purchases, and PAYG in respect of wages and salaries.

You will also be required to prepare accounts each year, and a tax return as the basis for determining your business tax liability.

Note that annual accounts for most businesses are not required to be made available for the public record, unlike the UK.

Q.   To what date are we required to prepare our accounts in Australia? What is our accounting reference date in Australia?

A.   In the absence of agreement from the Australian Taxation Office all businesses are required to prepare accounts to the 30th of June each year. However, where the Australian business is a branch or subsidiary of an overseas business an application can be lodged with the ATO for the use of what is called a Substituted Accounting Period.

An application for the use of a SAP should be lodged within a short period of the commencement of business in Australia.

Q. Can you help us set up and register our business in Australia?

A.   Yes, this is one of our main services to business clients. We can arrange for a new limited company to be incorporated in Australia, usually within a business day of receiving details from a client – at no additional cost for a quick incorporation.

We can also arrange all of the above mentioned business registrations and ATO agreement to the use of a Substituted Accounting Period so that the accounts for the Australian business are prepared to the same date as the UK business.

We are also pleased to liaise with existing accountants and tax advisors in the UK.

Our ongoing services to businesses are discussed here.