We all have the right to keep our taxation liability to a legal minimum. For all Aussie Expats, being overseas opens up many fantastic opportunities to reduce your tax not only while overseas but also when you return to Australia.
Here are some tax tips to help each type of expat keep their tax down.
New Expatriates
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Depending on what time of year you left Australia you could be due a substantial refund on the tax paid on your Australian based salary. Make sure you have received your Statement of Earnings so you can get your refund back early.
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Ensure you claim all the expenses incurred for your employment prior to departure, you will not be able to claim them afterwards.
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Assess whether you are resident or non resident, and consider the Capital Gains implications on your share portfolio if applicable, and affect on your overseas earnings.
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If you had a home which has now been rented out, ensure you claim all interest, maintenance, rates, and costs for the period since the of rental. Remember you can claim annual costs, like insurance, that where paid prior to renting the property on a pro rata basis.
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Make sure you have a property depreciation schedule if the property was built or substantially improved since 1985.
Continuing Expatriates
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Undertake all required maintenance on the property prior to 30th June if you are concerned that their may be a surplus rent against other expenses.
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If a property has been sold, assess the potential capital gains tax before the year end as you can use expenses on another property to offset and reduce the tax payable, this may include prepaying some interest on the other properties kept. You can also make a tax deductible contribution to reduce or extinguish the tax if appropriate.
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If you acquired a property during the year, confirm any depreciation entitlement, loan set up costs and other incidental expenses.
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Have your receipts ready for reference, including travel costs which you are entitled to claim.
Returning Expatriates
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Value all Non Australian property assets at the date of return by a suitably qualified valuer or other appropriate source. This will ensure you do not pay tax in Australia on any profits achieved whilst you have been overseas.
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Only include income from investments from the date of return onwards, not during the period you lived abroad.
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Ensure you properly claim any built up tax credits from property investment while you have been overseas to reduce the tax payable on your Australian salary.
