Individuals who are living in Australia and who have temporary residency visas may be able to make use of an exemption from the charge to tax in respect of most types of income – eg income from a let property, interest and dividend income – that have a source outside Australia.
For such people capital gains on the disposal of almost all types of investments are also not subject to tax in Australia – the disposal of a rental property in Australia being the main investment asset that is subject to Australian capital gains tax.
So what types of visa will usually qualify as a temporary visa?
If you are living in Australia as the holder of one of these subclasses of visas you may be able to exclude your overseas income from being chargeable to tax on your Australian tax return:
- 457 (Employer Sponsored)
- 482 (Temporary Skills Shortage)
- 489 (Skilled – Regional Sponsored)
- 417 (Working Holiday)
- 410 (Retirement)
- 405 (Investor Retirement)
- 461 (New Zealand Family Relationship)
- 444 (Special Category – for New Zealand citizens, so long as you are not the holder of a protected special category 444 visa)
- 188 (Business Innovation and Investment)
Note also that those who are living in Australia as the holders of Bridging Visas – ie they are awaiting a decision on an onshore visa application – are also able to make use of this exemption from the charge to income tax in Australia.
All of the above also assumes that the taxpayer is not in a relationship with an individual who is an Australian citizen or permanent resident – the temporary resident tax exemption is not available to such a person.
Note also that the above is not a complete list of visa subclasses which are temporary, and are eligible for the tax exemption.
Don’t forget though that you may nevertheless be required to disclose your overseas income on your Australian tax return each year as “target foreign income.”
The Australian Taxation Office web page which discusses the tax exemption for temporary visa holders is here.
If you are not sure whether you are eligible for this tax exemption please contact bdh Tax. Our Principal Alan Collett is a Registered Migration Agent as well as a Chartered Accountant and Registered Tax Agent, and is very familiar with the various visa types.
bdh Tax provides a fixed fee quote whenever possible to all who are interested in engaging our services.
We can assist with the preparation of tax returns in Australia – and in the UK.
If you are moving to Australia – or are already living in Australia – and would like a no obligation fixed fee proposal from a firm of tax advisors that understands the issues affecting new arrivals in Australia please contact us by completing the enquiry form on this webpage, or telephone your closest bdh Tax office.
We look forward to hearing from you.