Knowing All About Australian Finance

Australia is probably one of the most desirable places in the world to live, despite this, many Australians choose to live and work overseas as well as settling permanently outside of their Island continent. With professional financial planning this can be very financially rewarding.

Australian expats need to ensure that their personal circumstances are such that they are legitimately free of Australian lifetime taxes and in particular Australian income tax. Australians can currently earn just AUD 6,000 before being liable to income tax which has a starting rate of 15%. Once taxable income rises above AUD 30,000 it is taxed at 30%, with a 40% rate beginning with taxable incomes of AUD 75,001.

Australia does not levy income tax or any other tax based on citizenship but anyone who is 'tax resident' in Australia, regardless of citizenship, is subject to Australian Income tax on their worldwide income. The primary test for tax residency examines where the individual is actually living.

Australians need to comply with certain personal and financial conditions before they can be treated as non-residents of Australia for tax purposes. Broadly speaking, a person can become a non-resident of Australia for tax purposes by spending less than 183 days in Australia in any given tax year.

Australian tax law does provide some exceptions, whereby those not living in Australia can still be deemed to be tax resident but this can be avoided by most Australian expats if they have set up a permanent home overseas and are not Australian Government employees working at an overseas posting.

For those Australian expats who are able to claim non-residence, there is a further Australian finance planning consideration. Although able to escape tax on their income derived outside of Australia, non-residents actually pay Australian income tax or aussie expat tax on Australian sourced income at a higher rate than residents. 

This would include income from Australian bank deposits, income derived from Australian stock brokerage accounts as well as rental income. For the tax year ending on June 30, 2008, the following rates of tax are applied to the Australian income of non-residents, regardless of citizenship. Non residents are not given the AUD 6,000 tax free allowance. The first AUD 25,000 of income is taxed at 29% instead of 15%. The 30% rate that begins with taxable income of AUD 30,001 for residents commences at AUD 25,001 for non-residents.

Expats of any nationality might do well to consider the impact of this on their Australian assets and where possible, explore their options for moving these investments outside of Australia.

Once outside of the Australian tax net, the options for savings and investment, financial protection and estate planning with mortgage specialist are extensive. Your savings can grow tax free within investment plans that can provide you with a far more comfortable retirement than those back home and which can also be passed quickly, easily and free of tax, to your beneficiaries.

Professional financial planning for aussie expat finance is designed to make your life as an expat as comfortable and financially secure and rewarding as possible.