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Non Resident Savings Tax

Non Resident Savings Tax

Old Apr 28th 2016, 10:56 pm
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Default Non Resident Savings Tax

Hi.
Has anyone lefy Australia, and left a large substantial sum in the building society here in Australia. I ask as you recieve your interest tax free here. Well no tax is deducted so you have to inform the ATO when doing a tax return. I understand you do not get you personal tax free allowance here in Australia as a non resident, unlike the UK. So if you recieve interest while not living in Australia, you will owe tax on this interest at the end of the tax year. Can anyone tell me wjhat this rate of tax is? Also do you have to do a full tax return, how do you pay this tax owed. Just for example , interest recieved $1000, what amount of tax would you owe, and how do you inform the ATO, so to pay the amount owed. Thanks for any help, i just cannot find out an example on the web.
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Old Apr 28th 2016, 11:28 pm
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Default Re: Non Resident Savings Tax

You are supposed to tell the building society you are no longer Australian tax resident and they will withhold tax at source from future interest payments. Thereafter you no longer have any further Australian tax liability on that interest. I think the rate is 10%.

Depending on where you are now, that interest may well be taxable in your country of residence, in which case you will probably be able to claim a credit for the tax withheld.
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Old Apr 28th 2016, 11:33 pm
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Default Re: Non Resident Savings Tax

See more here. The rate is as specified in the relevant tax treaty between your new country of residence and Australia or 10% if there is no treaty. When I was living in the UK the rate was 10%.
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Old Apr 29th 2016, 12:09 am
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Default Re: Non Resident Savings Tax

Thanks Louie.


I thought it was 32.5%, tax on savings interest for a non resident.


Resident or non-resident?


But i could not work out whether it was for savings or just earnings; as like you have pointed out, it could be 10%?
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Old Apr 29th 2016, 7:57 am
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Default Re: Non Resident Savings Tax

The page you've quoted says:

"Non-residents do not pay the Medicare levy (and cannot claim Medicare benefits), and will have 10% of any interest earned from Australian bank accounts withheld for tax. The interest is not included in assessable income, but you will need to provide an overseas address otherwise tax will be withheld at a much higher rate."
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Old Apr 29th 2016, 11:19 pm
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Default Re: Non Resident Savings Tax

Originally Posted by louie
The page you've quoted says:

"Non-residents do not pay the Medicare levy (and cannot claim Medicare benefits), and will have 10% of any interest earned from Australian bank accounts withheld for tax. The interest is not included in assessable income, but you will need to provide an overseas address otherwise tax will be withheld at a much higher rate."
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Thanks Louie,


I called up the ATO, spoke to an "expert" in savings and expat taxation.


They confirmed as a non resident, then should you provide your financial institution with your overseas address, and they have your TFN. Then they will withold 10% of your Gross interest, and if this income is your only income while you are a non resident. Then there is no requirement to submit an annual tax return.


So i am pretty happy with that. Interest rates are pretty good here compared to the UK, and still good minus 10% taxation, so i will leave all funds here, till i come back, if i ever do.


I also asked about Forex gains, i asked in depth. There is no such tax, if the money is your own, whether the exchange rate goes up or down, whenever you bring it over, for how long you have been here. There are no issues with the ATO.
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Old Apr 30th 2016, 4:39 am
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Default Re: Non Resident Savings Tax

Originally Posted by sign
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Thanks Louie,


I called up the ATO, spoke to an "expert" in savings and expat taxation.


They confirmed as a non resident, then should you provide your financial institution with your overseas address, and they have your TFN. Then they will withold 10% of your Gross interest, and if this income is your only income while you are a non resident. Then there is no requirement to submit an annual tax return.


So i am pretty happy with that. Interest rates are pretty good here compared to the UK, and still good minus 10% taxation, so i will leave all funds here, till i come back, if i ever do.


I also asked about Forex gains, i asked in depth. There is no such tax, if the money is your own, whether the exchange rate goes up or down, whenever you bring it over, for how long you have been here. There are no issues with the ATO.

What about Superannuation? Can the tax on your growth also be reduced to 10% on that balance as well?


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