Tax rules for housewives - advice please
 

As one of that rare breed of "stay-at-home housewives", it is to our advantage here in the UK for the building society savings to be held in my name only, as the interest is paid gross.

Is it the same in Australia? And do I need a Tax File Number or not? Are there any other perks I should be aware of? Thanks.

Re: Tax rules for housewives - advice please
 

Hi Jacqui.

With rates of interest being so low the tax savings are marginal at best.

But in answer to your questions you do end up with more income if you are not being taxed on the income and your spouse is being taxed at (say) 40% => by having the savings in your name you retain 40% of the interest that would otherwise be paid to the Inland Revenue.

The same principle applies in Australia, although the tax rates are different. And you will have to provide a TFN to the bank otherwise they will deduct 48.5% tax from the interest => not good.




Alan Collett
alan-at-gomatilda-dot-com
Registered Migration Agent Number 0102534
and a Fellow of the Institute of Chartered Accountants in England and Wales
http://www.gomatilda.com, and
http://www.collettandco.com

Re: Tax rules for housewives - advice please
 

I have a few tax questions too.

I have savings I want to take to Australia (a bit over $100k). Will the interest I
get on any investment I make with this money be taxed in the same tax levels as
income? And how will the amount of money I am taking be taxed?

If I get a job and make AUS$18,000, whereas my investment makes AUS$6,000, am I right
to think my taxable income is AUS$24,000?

Thanks.

Lana

Re: Tax rules for housewives - advice please
 

Hi Jacqui,

My wife is also a "stay-at-home housewive" (and child-carer, etc). and I asked our
accountant this same question.

You could put all savings, shares, investments in your name but then the
government will treat this as income and you will have to submit a tax return as
well. If you use an accountant to submit both personal returns,most accountants
will charge for the service. The cost of this will usually far exceed the benefits
of being lower taxed.

You will probably only benefit if the accountant will do yours free-of-charge/for a
very lost cost, or you submit it yourself.

Hope this helps. AndyH.

Jacqui <[email protected]> wrote in message
news:<[email protected]>...
    > As one of that rare breed of "stay-at-home housewives", it is to our advantage here
    > in the UK for the building society savings to be held in my name only, as the
    > interest is paid gross.
    >
    > Is it the same in Australia? And do I need a Tax File Number or not? Are there any
    > other perks I should be aware of? Thanks.

Re: Tax rules for housewives - advice please
 

Hi Andy.

Yours is a fair point, but if the taxpayer only has interest income the filing of a Tax Return without the assistance of an accountant shouldn't be too onerous a task, particularly if you have been through the hoops of a visa application :-))

In that regard this site might be worth a look:
http://www.etax.com.au/default.asp

And I have also found the ATO's etax filing software pretty straightforward.

Best regards.




Alan Collett
alan-at-gomatilda-dot-com
Registered Migration Agent Number 0102534
and a Fellow of the Institute of Chartered Accountants in England and Wales
http://www.gomatilda.com, and
http://www.collettandco.com

Re: Tax rules for housewives - advice please
 

Hi Lana.

All your income is added together, and you then work out the tax liability based on the rates applying to the various slices of your income.

So yes, if your employment income is $18k and your interest income is $6k your assessable income is $24k. However, the first $6k of the income of a tax resident is free of tax (the "tax free threshold") and so in your example there effectively would be no tax payable on the interest income.

Income from employment is taxed under the Pay As You Go system, which means your employer will deduct tax from your gross salary and will pay that over to the ATO. At the end of the tax year you receive a PAYG Payment Summary which you use to fill in your personal Tax Return.

Hope this helps.




Alan Collett
alan-at-gomatilda-dot-com
Registered Migration Agent Number 0102534
and a Fellow of the Institute of Chartered Accountants in England and Wales
http://www.gomatilda.com, and
http://www.collettandco.com

Re: Tax rules for housewives - advice please
 

Thanks Alan, that helps a lot. Now I can understand the ATO site much better.

Lana

Alan Collett <[email protected]> wrote in message
news:<[email protected]>...
    > Hi Lana.
    >
    > All your income is added together, and you then work out the tax liability based on
    > the rates applying to the various slices of your income.
    >
    > So yes, if your employment income is $18k and your interest income is $6k your
    > assessable income is $24k. However, the first $6k of the income of a tax resident
    > is free of tax (the "tax free threshold") and so in your example there effectively
    > would be no tax payable on the interest income.
    >
    > Income from employment is taxed under the Pay As You Go system, which means your
    > employer will deduct tax from your gross salary and will pay that over to the ATO.
    > At the end of the tax year you receive a PAYG Payment Summary which you use to fill
    > in your personal Tax Return.
    >
    > Hope this helps.
    >
    >
    >
    >
    > Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534
    > and a Fellow of the Institute of Chartered Accountants in England and Wales
    > http://www.gomatilda.com, and http://www.collettandco.com