Tax Guidance for Australians Emigrating in 2025

When moving overseas, high-net-worth expats are advised to work with reputable firms that specialise in Australian tax laws for expats and international tax treaties. This is crucial to ensure compliance and minimise potential tax liabilities.

One of the key aspects to consider is the capital gains tax (CGT) on Temporary Absence Period (TAP) assets, including primary residences. Australian expats still owe CGT on these assets, even if they become non-residents. It's always best to seek professional Australian expat tax advice before leaving the country, as non-resident rates also apply to CGT liability in Australia.

If you decide to defer exit tax, it's essential to understand that this is an all-or-nothing decision, not applicable to some non-TAP assets. Deferring the exit tax payment requires paying tax on the entire period of ownership in Australia, even for non-resident periods.

Compulsory superannuation contributions no longer apply once a tax non-resident of Australia. However, if you return to Australia, you must pass one of the four residency tests to become a tax resident again. The rules for accessing the funds in a superannuation remain the same for non-residents.

If you sell your home while an Australian tax non-resident, CGT may be due. However, no CGT is due on a primary residence in Australia if it is rented out for up to 6 years. Transferring overseas pension income into Australian superannuation can be advantageous.

Expats returning to Australia are advised to consider what to do with income generated overseas. They may claim a Foreign Income Tax Offset (FITO) for foreign tax paid on income from another country. If you continue to owe taxes in the country of residence, it's worth exploring whether Australia has a Double Tax Agreement (DTA) with that country.

It's important to note that Australian expats are subjected to more expensive tax brackets and lose the 50% discount available to tax residents. There is no publicly available or standard measure called an "emigration quota" specific to an individual who recently left Australia; emigration is typically recorded as aggregated migration statistics rather than quotas per person.

Lastly, Australian expats no longer owe capital gains tax on non-TAP assets once they become Australian non-tax residents. Nomad Capitalist, a firm that helps high-net-worth individuals navigate these scenarios, works with experts in tax, investment strategy, asset protection, and immigration to provide comprehensive advice and solutions.

In conclusion, understanding the complexities of Australian expat taxation is essential for high-net-worth individuals planning to move overseas. Seeking professional advice and preparing financially before making the move can help minimise potential tax liabilities and ensure compliance with Australian tax laws.