Nightmare news for non res 457 holders
Unless i am misreading this and i seriously hope i am it looks as though non residents are going to pay 32.5 % tax. By my calculations someone on $50000 will pay an extra $7500 tax!! even without the effect of lafha
heres the news story If you are a non-resident worker… It's all bad news. Firstly, most of you will lose the Living Away from Home Allowance (see below), and from 1 July all non-resident workers will have to pay a blanket 32.5 per cent tax rate – regardless of whether they're low income earners. Read more: http://www.news.com.au/money/federal...#ixzz1uH0cUXvg |
Re: Nightmare news for non res 457 holders
I have not read it, but 457 visa holders are not classified as non resident. Most 457 visa holders would be tax resident.
Do not confuse visa status with tax status, it is very, very different. |
Re: Nightmare news for non res 457 holders
Bermudashorts: If you are right and i am beginning to think you are then i owe you a massive drink. I have both my kids who are on 457s in state of panic.
Bad enough to lose Lafha (which they have budgeted to lose) but they can't afford a tax rate of 32.5% on a 50 k salary. |
Re: Nightmare news for non res 457 holders
Originally Posted by ginstwin
(Post 10047791)
Bermudashorts: If you are right and i am beginning to think you are then i owe you a massive drink. I have both my kids who are on 457s in state of panic.
Bad enough to lose Lafha (which they have budgeted to lose) but they can't afford a tax rate of 32.5% on a 50 k salary. |
Re: Nightmare news for non res 457 holders
Originally Posted by ginstwin
(Post 10047791)
Bermudashorts: If you are right and i am beginning to think you are then i owe you a massive drink. I have both my kids who are on 457s in state of panic.
Bad enough to lose Lafha (which they have budgeted to lose) but they can't afford a tax rate of 32.5% on a 50 k salary. The 30% tax band has gone up to 32.5% which will effect everyone with income in that band. I am not a believer in LAFHA as you may have seen me mention on another thread, but I would be pretty shocked at a flat 32.5% flat tax rate and can't really believe it. |
Re: Nightmare news for non res 457 holders
I am really hopeful that as you guys say its poor tabloid journalism.
I can see the argument on the past to scrap LAFHA but i cannot possibly agree that it would be fair to tax 2 side by side workers on the same salary at massively different tax levels. A rough calculation with the new allowances has someone on 50k on a 17% tax rate. It would be grossly unfair to have his colleague on the same wage on a 32.5% rate . |
Re: Nightmare news for non res 457 holders
Originally Posted by ginstwin
(Post 10047817)
I am really hopeful that as you guys say its poor tabloid journalism.
I can see the argument on the past to scrap LAFHA but i cannot possibly agree that it would be fair to tax 2 side by side workers on the same salary at massively different tax levels. A rough calculation with the new allowances has someone on 50k on a 17% tax rate. It would be grossly unfair to have his colleague on the same wage on a 32.5% rate . |
Re: Nightmare news for non res 457 holders
Non residents are currently taxed a flat rate...back in the day when I had a WHV it was 29.5%...I don't think there is any dramatic change here. 457 visa holders are clearly tax residents.
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Re: Nightmare news for non res 457 holders
http://www.budget.gov.au/
For the source info on Lafha Page 39 of the budget overview pdf Better targeting tax concessions The Government will further reform the tax concession for living-away-from-home allowances and benefits, by ensuring it can only be used for the expenses of people who are legitimately maintaining a second home in addition to their actual home, for a maximum period of 12 months. This reform will apply from 1 July 2012 for arrangements entered into after 7.30pm (AEST) on 8 May 2012, and from 1 July 2014 for arrangements entered into prior to that time. |
Re: Nightmare news for non res 457 holders
we are citizens but are non resident...and we pay 30% tax on our rental income.
So it has not changed for non- residents. |
Re: Nightmare news for non res 457 holders
Originally Posted by Pomster
(Post 10048758)
we are citizens but are non resident...and we pay 30% tax on our rental income.
So it has not changed for non- residents. Gains up to 2012 Budget Day remain eligible for the 50% discount. => If possible only sell CGT assets showing a capital gain when you are back in Australia. Best regards. |
Re: Nightmare news for non res 457 holders
Originally Posted by bingobob777
(Post 10047798)
457 Visa holders ARE residents for tax purposes, hopefully that means we're OK :unsure:.
Best regards. |
Re: Nightmare news for non res 457 holders
Originally Posted by Alan Collett
(Post 10050583)
Capital Gains Tax has: the 50% CGT discount that was available to individuals who hold a CGT asset that is "taxable Australian property" for more than 12 months was removed for non-residents with effect from yesterday.
Gains up to 2012 Budget Day remain eligible for the 50% discount. => If possible only sell CGT assets showing a capital gain when you are back in Australia. Best regards. I didn't think "non-residents" were taxed on CGT events outside of OZ? This is from PWC "From 1 July 2006 an exemption applies for temporary residents in respect of all personal income (ordinary and statutory) which is sourced outside of Australia. However, all employment income worldwide to the extent it relates to the period of the visa will be assessable income. Temporary residents may disregard all CGT events in respect of CGT assets which are not “Taxable Australian Property”. In addition the accruals taxation rules under the Foreign Investment Fund rules, Controlled Foreign Corporations rules and the Transferor Trusts measures do not apply." |
Re: Nightmare news for non res 457 holders
I agree, but Pomster (to whom I was replying) has Aus source rental income - ie has property in Australia - and is a non-Aus resident.
Best regards. |
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