Oz tax question
Feb 10th 2001, 9:30 pm
#1
Guest
Posts: n/a
Hi everybody
We arrived in Australia about half way through the tax year and started work pretty soon
after that. We got TFN's and passed them on to our employers well within the time allowed.
Am I right in thinking that we will get a pro-rata tax free threshold for the year? If so
are employers generally fairly good at working tax out accordingly, IYSWIM.
While I'm on the subject, does anyone know the most tax advantagous way of handling the
UK tax situation. We left after working 6 months of the tax year and would therefore
been taxed accordingly. Is the situation the same and its worked out on a pro-rata basis
again or is there some advantages in declaring yourself non-resident for tax purposes
from that date.
We have no assets etc in the UK now, but will have to file a return in April for Year
2000/2001.
Thanks in advance
Hayden
We arrived in Australia about half way through the tax year and started work pretty soon
after that. We got TFN's and passed them on to our employers well within the time allowed.
Am I right in thinking that we will get a pro-rata tax free threshold for the year? If so
are employers generally fairly good at working tax out accordingly, IYSWIM.
While I'm on the subject, does anyone know the most tax advantagous way of handling the
UK tax situation. We left after working 6 months of the tax year and would therefore
been taxed accordingly. Is the situation the same and its worked out on a pro-rata basis
again or is there some advantages in declaring yourself non-resident for tax purposes
from that date.
We have no assets etc in the UK now, but will have to file a return in April for Year
2000/2001.
Thanks in advance
Hayden
Feb 10th 2001, 10:23 pm
#2
Guest
Posts: n/a
In misc.immigration.australia+nz on Sun, 11 Feb 2001 09:30:58 +1100
>Hi everybody
>
>We arrived in Australia about half way through the tax year and started work pretty
>soon after that. We got TFN's and passed them on to our employers well within the
>time allowed.
>
>Am I right in thinking that we will get a pro-rata tax free threshold for the year? If so
>are employers generally fairly good at working tax out accordingly, IYSWIM.
>
Won't even be pro-rata I don't think. I am not a tax accountant, but as far as I know,
your tax is on your whole of year earnings.
If you start work the 29th of June, earn $5000 that day, then as it's under the tax free
threshold, you get to keep it all
What your emplyer will do is look up their tax ready reckoner and say "OK, we are paying
'em this much a year. That works out to that much a week, meaning the tax I deduct is this
amount in this column."
Then at the end of the financial year, you fill in your tax return and attach your group
certificate. The Government says "OK... they earned this much in the taxable year, they
paid this much. Oh. They paid too much - we will give them some back."
Prettyt much you came in half way through so earned $X. you are paying tax as though you
earned $2*X. So you get all that extra back. Next financial year you will pay the same
amount in tax per week, but not get the huge refund at the end.
Zebee
>Hi everybody
>
>We arrived in Australia about half way through the tax year and started work pretty
>soon after that. We got TFN's and passed them on to our employers well within the
>time allowed.
>
>Am I right in thinking that we will get a pro-rata tax free threshold for the year? If so
>are employers generally fairly good at working tax out accordingly, IYSWIM.
>
Won't even be pro-rata I don't think. I am not a tax accountant, but as far as I know,
your tax is on your whole of year earnings.
If you start work the 29th of June, earn $5000 that day, then as it's under the tax free
threshold, you get to keep it all
What your emplyer will do is look up their tax ready reckoner and say "OK, we are paying
'em this much a year. That works out to that much a week, meaning the tax I deduct is this
amount in this column."
Then at the end of the financial year, you fill in your tax return and attach your group
certificate. The Government says "OK... they earned this much in the taxable year, they
paid this much. Oh. They paid too much - we will give them some back."
Prettyt much you came in half way through so earned $X. you are paying tax as though you
earned $2*X. So you get all that extra back. Next financial year you will pay the same
amount in tax per week, but not get the huge refund at the end.
Zebee
Feb 11th 2001, 10:03 am
#3
Guest
Posts: n/a
Hi there Hayden.
The Aussie tax free threshold will indeed be pro-rated in the income year that you become
resident. So if you became resident in Australia on the 1st of January 2001 the first
$3,000 of income will be free of tax (6/12 of the full year's threshold). Incidentally,
the same pro-rating applies when you cease to be Aussie tax resident.
With regard to UK tax, the answer to your question is "It all depends". Clearly I don't
have the full details of your finances or tax history but in general terms most people who
leave the UK are entitled to some form of income tax repayment. Unlike Australia, UK
personal allowances are NOT pro-rated and as they tend to be given against salaried income
on a month by month basis there is usually a balance of allowances available to offset
against already taxed income, thereby generating a tax repayment. That said, if you have a
continuing source of untaxed income in the UK (such as rental income) the position may be
different, although your question indicated that this won't be the case.
The main adverse issues affecting becoming non-UK resident involve clawbacks of capital
gains tax deferal reliefs such as Enterprise Investment Scheme and Venture Capital Trust
deferral claims. If you believe you haven't got anything to worry about on that front,
then apply to your tax office for form P85 to hopefully trigger a repayment of tax. You'll
also have to complete the Non-Residence Supplement on your 2001 Tax Return.
Assuming the Revenue agree you are non-UK resident you will probably want to rely on an
Extra Statutory Concession so that any income (other than UK property income) that arises
during the current tax year but after the date that you leave is outside the scope of UK
Income Tax. Capital gains arising in the year that you leave the UK and after the date of
your departure, however, are slightly different.
Hopefully this assists - but come back to me if you want any help, including assistance
with the preparation of your 2001 Tax Return in due course.
Regards.
Alan Collett [email protected] www.collettandco.com
Collett and Co Chartered Accountants and our staff are not responsible or liable for the
contents of this message or for any actions taken as a result of the advice given herein.
Any opinions or recommendations expressed herein are those solely of the author. Messages
sent via this medium may be subject to delays, non-delivery and unauthorised alteration.
> Hi everybody
>
> We arrived in Australia about half way through the tax year and started
work
> pretty soon after that. We got TFN's and passed them on to our employers well within the
> time allowed.
>
> Am I right in thinking that we will get a pro-rata tax free threshold for the year? If
> so are employers generally fairly good at working tax out accordingly, IYSWIM.
>
> While I'm on the subject, does anyone know the most tax advantagous way of handling the
> UK tax situation. We left after working 6 months of the tax year and would therefore
> been taxed accordingly. Is the situation the same and its worked out on a pro-rata basis
> again or is there some advantages
in
> declaring yourself non-resident for tax purposes from that date.
>
> We have no assets etc in the UK now, but will have to file a return in
April
> for Year 2000/2001.
>
> Thanks in advance
>
> Hayden
The Aussie tax free threshold will indeed be pro-rated in the income year that you become
resident. So if you became resident in Australia on the 1st of January 2001 the first
$3,000 of income will be free of tax (6/12 of the full year's threshold). Incidentally,
the same pro-rating applies when you cease to be Aussie tax resident.
With regard to UK tax, the answer to your question is "It all depends". Clearly I don't
have the full details of your finances or tax history but in general terms most people who
leave the UK are entitled to some form of income tax repayment. Unlike Australia, UK
personal allowances are NOT pro-rated and as they tend to be given against salaried income
on a month by month basis there is usually a balance of allowances available to offset
against already taxed income, thereby generating a tax repayment. That said, if you have a
continuing source of untaxed income in the UK (such as rental income) the position may be
different, although your question indicated that this won't be the case.
The main adverse issues affecting becoming non-UK resident involve clawbacks of capital
gains tax deferal reliefs such as Enterprise Investment Scheme and Venture Capital Trust
deferral claims. If you believe you haven't got anything to worry about on that front,
then apply to your tax office for form P85 to hopefully trigger a repayment of tax. You'll
also have to complete the Non-Residence Supplement on your 2001 Tax Return.
Assuming the Revenue agree you are non-UK resident you will probably want to rely on an
Extra Statutory Concession so that any income (other than UK property income) that arises
during the current tax year but after the date that you leave is outside the scope of UK
Income Tax. Capital gains arising in the year that you leave the UK and after the date of
your departure, however, are slightly different.
Hopefully this assists - but come back to me if you want any help, including assistance
with the preparation of your 2001 Tax Return in due course.
Regards.
Alan Collett [email protected] www.collettandco.com
Collett and Co Chartered Accountants and our staff are not responsible or liable for the
contents of this message or for any actions taken as a result of the advice given herein.
Any opinions or recommendations expressed herein are those solely of the author. Messages
sent via this medium may be subject to delays, non-delivery and unauthorised alteration.
> Hi everybody
>
> We arrived in Australia about half way through the tax year and started
work
> pretty soon after that. We got TFN's and passed them on to our employers well within the
> time allowed.
>
> Am I right in thinking that we will get a pro-rata tax free threshold for the year? If
> so are employers generally fairly good at working tax out accordingly, IYSWIM.
>
> While I'm on the subject, does anyone know the most tax advantagous way of handling the
> UK tax situation. We left after working 6 months of the tax year and would therefore
> been taxed accordingly. Is the situation the same and its worked out on a pro-rata basis
> again or is there some advantages
in
> declaring yourself non-resident for tax purposes from that date.
>
> We have no assets etc in the UK now, but will have to file a return in
April
> for Year 2000/2001.
>
> Thanks in advance
>
> Hayden
Feb 11th 2001, 11:12 am
#4
Guest
Posts: n/a
Hayden,
Have just worked out that if you still have 3 months of UK personal allowances available
(assuming you left the UK on 31/12/2000) the tax repayment could be around £440 ($1,160)
(ie £4,385 personal allowance for tax year 2000/01 x 3/12 x 40%).
Regards,
Alan C [email protected] www.collettandco.com Collett and Co Chartered Accountants and
our staff are not responsible or liable for the contents of this message or for any
actions taken as a result of the advice given herein. Any opinions or recommendations
expressed herein are those solely of the author. Messages sent via this medium may be
subject to delays, non-delivery and unauthorised alteration.
> Hi everybody
>
> We arrived in Australia about half way through the tax year and started
work
> pretty soon after that. We got TFN's and passed them on to our employers well within the
> time allowed.
>
> Am I right in thinking that we will get a pro-rata tax free threshold for the year? If
> so are employers generally fairly good at working tax out accordingly, IYSWIM.
>
> While I'm on the subject, does anyone know the most tax advantagous way of handling the
> UK tax situation. We left after working 6 months of the tax year and would therefore
> been taxed accordingly. Is the situation the same and its worked out on a pro-rata basis
> again or is there some advantages
in
> declaring yourself non-resident for tax purposes from that date.
>
> We have no assets etc in the UK now, but will have to file a return in
April
> for Year 2000/2001.
>
> Thanks in advance
>
> Hayden
Have just worked out that if you still have 3 months of UK personal allowances available
(assuming you left the UK on 31/12/2000) the tax repayment could be around £440 ($1,160)
(ie £4,385 personal allowance for tax year 2000/01 x 3/12 x 40%).
Regards,
Alan C [email protected] www.collettandco.com Collett and Co Chartered Accountants and
our staff are not responsible or liable for the contents of this message or for any
actions taken as a result of the advice given herein. Any opinions or recommendations
expressed herein are those solely of the author. Messages sent via this medium may be
subject to delays, non-delivery and unauthorised alteration.
> Hi everybody
>
> We arrived in Australia about half way through the tax year and started
work
> pretty soon after that. We got TFN's and passed them on to our employers well within the
> time allowed.
>
> Am I right in thinking that we will get a pro-rata tax free threshold for the year? If
> so are employers generally fairly good at working tax out accordingly, IYSWIM.
>
> While I'm on the subject, does anyone know the most tax advantagous way of handling the
> UK tax situation. We left after working 6 months of the tax year and would therefore
> been taxed accordingly. Is the situation the same and its worked out on a pro-rata basis
> again or is there some advantages
in
> declaring yourself non-resident for tax purposes from that date.
>
> We have no assets etc in the UK now, but will have to file a return in
April
> for Year 2000/2001.
>
> Thanks in advance
>
> Hayden
Feb 18th 2001, 2:24 am
#5
Guest
Posts: n/a
Thanks Alan
We actually left 22nd September, so we have around 6 months UK allowances available.
Basically our tax affairs are very simple. House sold, no clever tax schemes, just 2 PAYE
jobs if you see what I mean.
I'll send for the required forms. The delay has been due to my former employer being slow
with the P45, like I still haven't got it.
But I'll get that sorted soon.
Thanks again for your help
Hayden
> Hayden,
>
> Have just worked out that if you still have 3 months of UK personal allowances available
> (assuming you left the UK on 31/12/2000) the tax repayment could be around £440 ($1,160)
> (ie £4,385 personal allowance for tax year 2000/01 x 3/12 x 40%).
>
> Regards,
>
>
>
> Alan C [email protected] www.collettandco.com Collett and Co Chartered Accountants
> and our staff are not responsible or liable for the contents of this message or for any
> actions taken as a
result
> of the advice given herein. Any opinions or recommendations expressed herein are those
> solely of the author. Messages sent via this medium may
be
> subject to delays, non-delivery and unauthorised alteration.
>
> > Hi everybody
> >
> > We arrived in Australia about half way through the tax year and started
> work
> > pretty soon after that. We got TFN's and passed them on to our employers well within
> > the time allowed.
> >
> > Am I right in thinking that we will get a pro-rata tax free threshold
for
> > the year? If so are employers generally fairly good at working tax out accordingly,
> > IYSWIM.
> >
> > While I'm on the subject, does anyone know the most tax advantagous way
of
> > handling the UK tax situation. We left after working 6 months of the tax year and
> > would therefore been taxed accordingly. Is the situation the
same
> > and its worked out on a pro-rata basis again or is there some advantages
> in
> > declaring yourself non-resident for tax purposes from that date.
> >
> > We have no assets etc in the UK now, but will have to file a return in
> April
> > for Year 2000/2001.
> >
> > Thanks in advance
> >
> > Hayden
> >
> >
We actually left 22nd September, so we have around 6 months UK allowances available.
Basically our tax affairs are very simple. House sold, no clever tax schemes, just 2 PAYE
jobs if you see what I mean.
I'll send for the required forms. The delay has been due to my former employer being slow
with the P45, like I still haven't got it.
But I'll get that sorted soon.
Thanks again for your help
Hayden
> Hayden,
>
> Have just worked out that if you still have 3 months of UK personal allowances available
> (assuming you left the UK on 31/12/2000) the tax repayment could be around £440 ($1,160)
> (ie £4,385 personal allowance for tax year 2000/01 x 3/12 x 40%).
>
> Regards,
>
>
>
> Alan C [email protected] www.collettandco.com Collett and Co Chartered Accountants
> and our staff are not responsible or liable for the contents of this message or for any
> actions taken as a
result
> of the advice given herein. Any opinions or recommendations expressed herein are those
> solely of the author. Messages sent via this medium may
be
> subject to delays, non-delivery and unauthorised alteration.
>
> > Hi everybody
> >
> > We arrived in Australia about half way through the tax year and started
> work
> > pretty soon after that. We got TFN's and passed them on to our employers well within
> > the time allowed.
> >
> > Am I right in thinking that we will get a pro-rata tax free threshold
for
> > the year? If so are employers generally fairly good at working tax out accordingly,
> > IYSWIM.
> >
> > While I'm on the subject, does anyone know the most tax advantagous way
of
> > handling the UK tax situation. We left after working 6 months of the tax year and
> > would therefore been taxed accordingly. Is the situation the
same
> > and its worked out on a pro-rata basis again or is there some advantages
> in
> > declaring yourself non-resident for tax purposes from that date.
> >
> > We have no assets etc in the UK now, but will have to file a return in
> April
> > for Year 2000/2001.
> >
> > Thanks in advance
> >
> > Hayden
> >
> >
