AU Tax Guide For Australians Moving Abroad
Moving overseas triggers immediate Australian tax obligations most expats do not know exist. ODIN Tax is a Registered Australian Tax Agent that handles residency determinations, departure declarations, CGT, and ongoing compliance for Australian expats across 40+ countries.
- 2,300+ Australian expats served across 40+ countries
- 4.9/5 Google rating from 400 client reviews
- Specialist across 4 ATO residency tests and 40+ Double Tax Agreements
This page provides general information only, not personal tax advice. Tax rules are subject to change. Speak to a Registered Australian Tax Agent for advice specific to your circumstances.
CONTENTS
What happens to your Australian tax residency when you move abroad?
Your tax residency status does not change automatically when your plane departs. The ATO applies four distinct tests: the Resides Test, the Domicile Test, the 183-Day Test, and the Commonwealth Superannuation Test. Failing to correctly determine residency is the single most common and costly mistake Australian expats make. Non-residents and residents face materially different tax rates and entitlements.
| ATO Residency Test | Key Question | Typical Expat Relevance |
|---|---|---|
Resides Test | Do you reside in Australia by ordinary concepts? | Catches expats with strong ongoing Australian ties |
Domicile Test | Is your domicile Australia and permanent home abroad? | Primary test for most departing Australians |
183-Day Test | Were you physically in Australia 183+ days this income year? | Can re-establish residency on extended return visits |
Commonwealth Superannuation Test | Are you a contributing member of a Commonwealth super fund? | Applies to federal government employees posted overseas |
Do you have to notify the ATO when you leave Australia?
Declaring your departure is mandatory, not optional. Failing to notify the ATO of a change in tax residency means you remain assessed as an Australian resident, continue to incur Medicare Levy obligations, and potentially under-report or over-report income for years. Proactive notification also establishes a clean start date for non-resident CGT and withholding tax rules to apply correctly.
- Notify the ATO of your change in residency status
- Update your address and contact details with the ATO
- Lodge any outstanding Australian tax returns before or shortly after departure
- Cancel or adjust private health insurance and Medicare Levy Exemption Certificates as applicable
- Advise banks and financial institutions of your non-resident status (non-resident withholding tax on Australian interest income: 10% for the 2024-25 financial year, subject to change)
How does Capital Gains Tax work for Australians who move abroad?
Non-residents lose access to the 50% CGT discount on gains accrued after becoming a non-resident. From 1 July 2027, new legislation replaces the 50% CGT discount with cost-base indexation; residents can still use the discount for gains accrued before that date, and foreign residents generally cannot access it. On top of this, Australian property sold by a foreign resident is subject to 15% Foreign Resident CGT Withholding (FRCGW) collected at settlement. These two rules combined represent a significant financial exposure that many expats and their generalist accountants do not anticipate until it is too late.
- 50% CGT discount: available only on gains accrued while an Australian tax resident
- 15% FRCGW: withheld by the buyer's conveyancer at settlement on applicable properties
- Main Residence Exemption: limited for non-residents; ATO rules changed; advice required
- Selling before departure may preserve access to the full 50% discount (scenario-specific)
- Foreign residents must lodge an Australian tax return in the year of sale
What else changes when you become an Australian non-resident for tax?
Tax residency status touches nearly every part of your Australian financial life. Superannuation, HECS/HELP debt, rental income, foreign income, Medicare, and family payments all operate differently once you are a non-resident. Getting one element wrong can compound across multiple income years.
| Area | Non-Resident Position (General) | Key Action |
|---|---|---|
Medicare Levy | Non-residents are generally exempt from the 2% Medicare Levy | Claim exemption in your return |
Superannuation (DASP) | Temporary residents may access super on departure; Australians cannot until preservation age | DASP processing for eligible visa holders |
HECS/HELP Debt | Non-residents must self-report and repay based on worldwide income | Annual self-assessment and repayment |
Foreign Income | Non-residents are taxed only on Australian-sourced income | Foreign Income Tax Offset may apply if DTA country |
Rental Income | Taxable in Australia; negative gearing rules still apply | Annual return required |
Double Taxation | Australia has DTAs with 40+ countries including UK, USA, Singapore, Japan | Apply FITO to avoid double tax |
Spouse / Family Income | Foreign spouse income not taxable in Australia but affects some offsets | Declare correctly in return |
“ODIN Tax exclusively serves Australian expats and non-residents. Every client, every process, and every piece of knowledge is built around the non-resident tax landscape, not bolted on from a general accounting practice.”
ODIN Tax, Registered Australian Tax Agent
Frequently Asked Questions
What tax issues should I sort out before leaving Australia?
Before departure, lodge any overdue Australian tax returns, determine your residency status under the ATO’s four tests, notify the ATO of your change in circumstances, advise your bank of your non-resident status, and review any property CGT exposure. Selling an Australian property before departure may preserve access to the 50% CGT discount, depending on your individual circumstances. This is general information only; speak to a Registered Australian Tax Agent for advice specific to your situation.
What happens if I don't declare my departure to the ATO?
If you do not notify the ATO that you have become a non-resident, the ATO continues to assess you as an Australian resident. This means you remain liable for tax on worldwide income, may incorrectly pay or claim the Medicare Levy, and risk penalties and interest on any resulting shortfall. The ATO can and does audit expat tax files, particularly where property transactions or significant foreign income are involved.
How do I avoid being taxed twice on the same income?
Australia has Double Taxation Agreements (DTAs) with 40+ countries, including the UK, USA, Japan, Singapore, and UAE. Where a DTA applies, you can claim a Foreign Income Tax Offset (FITO) in your Australian return for tax paid overseas on the same income. The mechanics differ by country and income type. A Registered Australian Tax Agent with DTA experience is the right starting point, not a generalist accountant.
Can I access my superannuation while living abroad?
Australian citizens and permanent residents cannot access superannuation early simply by moving overseas. Preservation age rules still apply. Temporary visa holders who have permanently departed Australia may be eligible for a Departing Australia Superannuation Payment (DASP). ODIN Tax processes DASP applications. Attempting to access super outside the legal conditions triggers significant tax penalties.
Do I need to report foreign investments and overseas bank accounts on my Australian tax return?
As an Australian non-resident, you are taxed only on Australian-sourced income. However, if you own Australian shares, Australian property, or other Australian assets, those remain reportable and potentially taxable in Australia. Overseas rental income, dividends, and bank interest are generally not taxable in Australia once you are a non-resident, but the year of departure requires careful apportionment of income sources.
What are the tax consequences of returning to Australia after living abroad?
When you return to Australia and re-establish Australian tax residency, your worldwide income becomes taxable again from the date residency resumes. CGT assets you held as a non-resident are treated as having been acquired at market value on the date you re-establish residency, which affects future gain calculations. If you have outstanding foreign tax credits, overdue lodgments, or offshore assets, these need to be resolved before or shortly after your return.
What if I haven't filed Australian tax returns for multiple years while overseas?
Unfiled returns attract penalties and general interest charges. However, the ATO has run amnesty and catch-up programs in the past, and penalty negotiation is possible in many cases. ODIN Tax specialises in overdue and backdated lodgment for multiple income years, including penalty management strategy. The longer the gap, the more complex the resolution, so acting sooner rather than later reduces exposure. This is general information only; outcomes vary by individual circumstances.
Does the Medicare Levy apply if I live overseas?
Non-residents are generally exempt from the 2% Medicare Levy. However, the exemption must be correctly claimed in your Australian tax return for the relevant financial year. If you are assessed as an Australian resident for tax purposes despite living overseas, the Medicare Levy applies. Correct residency determination is the prerequisite to correctly claiming or waiving the levy.
What is the 15% Foreign Resident CGT Withholding and does it apply to me?
Foreign Resident Capital Gains Tax Withholding (FRCGW) requires the buyer of an Australian property to withhold 15% of the purchase price at settlement and remit it to the ATO, when the seller is a foreign resident. This is a withholding mechanism, not a final tax. The seller lodges an Australian tax return for the year of sale, and the withheld amount is applied against the actual CGT liability. If the final tax liability in dollars is lower than the total amount withheld, the excess is refunded. If higher, additional tax is owed.
Can ODIN Tax help with Australian property purchases or mortgages as well as tax?
Yes. ODIN Tax is part of ODIN, which also includes ODIN Mortgage. ODIN provides mortgage broking, tax compliance, and conveyancing services for Australian expats and non-residents, with tax strategy built into your property acquisition plan from the outset. This is a distinct structural difference from using a generalist accountant and a separate mortgage broker independently.
About ODIN Tax
ODIN Tax is Australia’s specialist tax agent practice for Australian expats and non-residents, operating as part of ODIN alongside ODIN Mortgage. ODIN Tax is a Registered Australian Tax Agent and has served 2,300+ Australian expats across 40+ countries, with a 4.9/5 Google rating from over 400+ verified client reviews. ODIN Tax exclusively serves the non-resident and expat market, covering Australian tax return preparation, overdue lodgments, tax residency determination, CGT, DASP, HECS/HELP, and Foreign Income Tax Offset applications.
General information disclaimer: All content on this page is general information only and does not constitute personal tax advice. Tax laws and ATO administrative positions change. Rates and thresholds referenced are indicative for the relevant financial year stated and may not apply to future years. Consult a Registered Australian Tax Agent for advice specific to your circumstances.
