Leaving Australia to live and work overseas whether that be temporarily or permanently could mean you have a continuing filing obligation to the ATO – for example, if you have an outstanding HECS/HELP debts.
If you are planning to live and work overseas and have an outstanding study or training support loan, you are required to:
- update your contact details and submit an overseas travel notification within seven days of leaving Australia. This is if you have an intention to (or already) reside overseas for 183 days or more in any 12 months
- lodge your worldwide income or a non-lodgment advice to the ATO.
This applies to people with the following types of loans:
- Higher Education Loan Program (HELP – formerly known as HECS)
- VET Student Loan (VSL)
- Trade Support Loan (TSL).
With effect from 1st July 2016 (30 June 2017) as a non resident of Australia you will need to report your Worldwide income to the ATO ‘Worldwide income’ is a combination of any Australian income and any foreign sourced income you receive while you reside outside of the country. This is done so by preparing an Australian Tax Return or non lodgment advice.
But what a lot of expats do not realise is that even if your worldwide income does not exceed the threshold of $51,957, if you earn more than $12,989 you are still obligated to report your worldwide income to the ATO.
What you must know about HECS-HELP debt while living and working overseas:
- Annual salary threshold – at the beginning of this financial year ended 30 June 2019 the threshold for making repayments on HECS-HELP dropped to $51,957 AUD – this includes income both from Australia and overseas.
- You must report income for trips longer than 183 days and notify the ATO of all your earnings when abroad over 6 months, even if you do not work for the entire time.
- Heavy fines exist for ignoring HECS-HELP repayments and these penalties can be significant of up to $3,600 (https://www.smh.com.au/money/tax/what-you-need-to-know-about-your-student-debt-before-heading-overseas-20180430-p4zcf7.html) for travellers who do not pay back study debts while living and working overseas.
Earn under $12,989 – File a non-lodgement advice:
- In the instance where you earn less than 25% of the minimum repayment threshold, which is $12,989 AUD for the 2018-19 financial year, you are required to submit a non-lodgement advice with the ATO. This means simply logging in to myGov and following the prompts – essentially what you are doing is letting the tax office know that you will not be lodging a tax return in the current financial year.
Earn between $12,989 and $51,957 – Report income but don’t make repayments:
- For expats that make more than $12,989, it’s compulsory to report worldwide income to the ATO before 31 October of the following Australian financial year. While you are required to file a report on your overseas income, if you make less than $51,957 AUD you are still below the repayment threshold, so no overseas levy will be raised.
Income over $51,957 – Compulsory repayments kick in:
- If you do earn over the repayment threshold you will have to start paying your HECS-HELP loan in the form of compulsory repayments or an overseas levy.
- All compulsory HECS-HELP payments from overseas are made through your tax return which can be lodged from July. In this case, once your worldwide income has been assessed, the ATO will notify you on the amount you are required to pay, which is then processed through your tax return.
GM Tax offers the following services to individuals who are moving overseas for work and personal reasons:
- Tax planning advice, with a regard had to your residency status in Australia and the impact of ceasing to be an Australian Tax Resident or a dual resident with an overseas country.
- Pre departure tax planning advice to ensure you are aware of your Australian and (UK if travelling to the UK) reporting and filing obligations.
- Help with preparing Australian Tax returns (UK Tax Returns if you are travelling to the UK), with all returns submitted Australian Taxation Office (HMRC) electronically.
- Assistance to ensure income is properly taxed and not taxed twice. This includes guidance relating to non-Australian residents receiving Australian rental income, dividends and bank interest
- Guidance on accessing of your Australian superannuation as a non resident of Australia
GM Tax provides a fixed fee quote whenever possible to all who are interested in engaging our services.
If you are moving to Australia or are already living in Australia – and would like a free no obligation fee proposal from a firm of tax advisors that understands the tax and financial issues affecting people arriving in Australia more than any other please complete the enquiry form on this page, or please telephone us on 08 9261 7762 (from outside Australia: +61 (0)8 9261 7762) or an office local to you.
We shall be delighted to have a free initial discussion with you, after which we can send a no obligation fixed fee proposal to you.