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Tax Residency

Tax Issues:  Hong Kong residents moving to Australia

In the growing unrest in Hong Kong, you may be considering moving to Australia – you should be aware of the following tax issues:

  1. When moving monies/cash to Australia, if you can show that the monies were taxed before they were transferred to Australia, they will not be subject to tax in Australia.
  2. Superannuation:

If you have monies in a pension fund, you can rollover these funds into an Australian superannuation fund provided you do this as soon as you become a resident of Australia.

  1. Foreign assets/Offshore investments

If you become an Australian resident, dividends and rental income received from foreign investments are subject to tax in Australia when a dividend is received.

You will also be subject to capital gains tax (CGT) when you sell any offshore asset.  The amount of the capital gain is the difference between the value of the asset at the time you become a resident of Australia and the time at which you sell the asset.

a. Residential Property

If you own a residential property offshore, you will need to have the property valued when you become a resident of Australia, and this price will then become a guide for the tax you will pay when you sell the property.

If you rent the property offshore when you become a resident then all the rent, minus expenses, will be fully taxable in Australia.

b.  Shares

All shares, regardless of whether they are Australian shares, are taxable in Australia when you become a resident.

Selling an overseas investment portfolio after a non-resident has become a tax resident of Australia triggers significant Capital Gains Tax  consequences.

If you are unsure about the tax consequences if you move to Australia, contact us now.  Waterhouse Lawyers are experts at providing advice on how best to structure your tax affairs.

 

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