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Expat tax changes create more uncertainty



22 February 2010

Professor Michael Dirkis comments on the removal of the Section 23AG exemption in last year's federal budget, which may lead to the cost for expats preparing a tax return exceeding the size of the tax credit claimed.

In an article in today's edition of The Australian, Professor Dirkis provides an example of a potential outcome.

"Say a gap-year student from Australia works in an English pub for a few weeks for maybe pound stg. 200 ($345) a week that will all be taxable back in Australia.

"They've got to report the dollar equivalent in their Australian tax return and they'll only get a tax credit for UK tax paid if they file a UK tax return for the UK tax year, which I believe ends on April 15," he says.

"But most people haven't lodged tax returns for years in the UK, where the tax system relies on PAYE records, so they'll have to find a UK tax agent to prepare one," he adds, noting that the timing differences will create problems of their own.

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Contact: Greg Sherington

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