AJRussell

I am transferring my role from London to Sydney - makes life easier for the move (I was going anyway!)

My company is giving me a large relocation contribution - I know where I stand with HMRC in terms of tax free costs.

Question is, where do i stand with Aussie Tax office, as I have the opportunity for my local office to pay most or all of the relocation fund into a Australian account. Will I have to declare that allocation to ATO ?

Andrew

spouse of scouse

Hi Andrew. The ATO doesn't seem to know how to produce information in plain English, however this might help
http://www.ato.gov.au/General/Fringe...ringe_benefits

From my reading of it, it appears that relocation allowances are subject to either Pay As You Go (PAYG) tax or Fringe Benefits tax.

The general rule of thumb in Oz is if it has a $ sign in front of it, it's taxed.

ajw

Hi,

We are relocating back to Australia after a stint in Asia and are being provided with a relocation allowance.

Our advice has been as follows:-

The following costs associated with relocation of an employee (both new and existing) are exempt from Fringe Benefits Tax (FBT) if they are required to change their job locations:

--employee and family travel costs to the new work location, including accommodation and meals to break the journey, and accident insurance;

--removal and storage of household goods and effects (including pets), including removal, storage, packing, unpacking and insurance of household effects. The removal must take place within 12 months of starting employment duties at the new location;

--temporary accommodation (see below for time limit);

--costs of sale or purchase of houses owned by an employee on job relocation – such as stamp duties, legal fees and commissions;

--cost of connecting electricity, gas and telephone if they are connected within 12 months of starting work at the new location; and

--the cost of engaging a relocation consultant under an arm's length arrangement to assist in the relocation of an employee where the employee moves residence as part of their employment.

Time limit for temporary accommodation when relocating:

--If an employee is provided with temporary accommodation (including household goods) when changing his/her usual place of residence in the course of their employment (or starting new employment) the benefit may be reduced to nil. The exemption takes two forms:

--Accommodation at former location: An exemption applies for a maximum of 21 days for temporary accommodation at the employee's former locality. This applies where the house is no longer available (eg. sold) or it is unsuitable for residential use due to removal of furniture or other matters caused by the change in employment.

--Accommodation at new locality: After starting work at the new locality the employee must make sustained, reasonable efforts to obtain permanent accommodation. The maximum exemption period is usually four months, starting seven days before starting the new employment, and ending when it could reasonably be expected that the new residence would be occupied. The exemption period can increase to six months where the employee gives to the employer a declaration which details efforts made to find permanent accommodation. The exemption can extend to 12 months if a similar declaration is made and the employee sold his/her residence at the previous locality within six months of starting the new employment


Anything else is generally processed through payroll and is subject to marginal tax rates.

AJRussell

HMRC seems more generous in its 'use of funds' - I can use it to replace goods that arent compatible with the region. i.e. Electronics. Might be easier for me to just get a lump sum paid here and use XE.com to transfer the rest at the best rate!