Murphy Tax Lawyers and Advisors

The article below explores some of the current tax issues for US expats relocating to Australia.

If you are a US expat relocating to Australia, there are a number of important expat tax issues to consider in making the move down to Australia from both an Australian and US tax perspective.

We have outlined some of the important tax considerations below:

Retirement Planning – how will your US 401k/IRA be taxed when relocating to Australia and does it make sense to contribute to your US Retirement Plans or Australian Superannuation going forward? Generally speaking, it can be problematic for US citizens to contribute to Australian superannuation so it is important to best consider how to contribute to your US plans or other investments which offer more favourable tax treatment.
ASX Investments vs US based investments – Australian ASX investments are offered favoured for Australian investors seeking income in retirement due to the franking credit system in Australia. However certain Australian ASX ETF’s or ASX listed mutual funds may be considered Passive Foreign Investment Funds (PFICS) from a US tax perspective and face punitive tax treatment from a US tax perspective for US clients.
The Main Home – the purchase and sale of a main residence in Australia in normally free from Australian taxation under the main residence concession. However the US may tax any gain on the sale of the Australian home above $250,000 for individuals or $500,000 for married couples. Accordingly, it would be important to consider how to best structure the purchase of an Australian property and how to best optimise offset accounts and mortgages.
Estate Planning and the use of a Trust. Should you consider the use of as US Trust or Australian Family Trust for estate tax and income tax planning purposes? This is a common question we receive, and it is never a one size fits all approach. It will depend very much on ones personally circumstances and the nature of the assets in question.

Australian and US Tax and Estate Planning

Australian and US Tax and Estate Planning

During our recent visit to the US, we met with several US international estate lawyers.

In particular, we discussed some of the important tax considerations for US citizens residing in Australia looking to manage their US assets and estates.

From a US tax perspective, it is typical for US assets to be held in a US Trust for estate tax planning purposes or to assist in managing probate.

However for Australian tax purposes, there are some important tax considerations to consider, including:

1. Having an Australian resident Trustee can result in the US Trust becoming an Australian resident trust from the date of appointment of the Australian resident Trustee.

2. Distributions from the US Trust (prior to the inheritance date) can be taxed in Australia as income under Section 99B. It will be important to look at the 'corpus' exemptions.

3. At the time of passing, it will be important that the correct documentation and evidence is obtained by the US Trust for the purposes of Section 99B to ensure the 'corpus' or capital values are supported.

Looking forward to joining Apt Wealth Partners and John Versace CFP® to discuss the US and Australian tax and financial implications of investing in property, shares and more.

Please register for the webinar below on 5 June.

Apt Wealth Partners Apt Wealth Partners
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Property and other investments require unique considerations for Australian and US expats. Join us on 5th June (Australia) and 4th June (US) as we discuss the tax implications for expats across property, shares, and more.

Hosted by experienced financial adviser at Apt Wealth Partners John Versace CFP®, leading expat tax advisor and tax lawyer Bradley Murphy, and US tax specialist Khandra Wong, this webinar will explore:

• Tax implications for US/Australian property ownership and shares
• Potential investment strategies to navigate US/Australian tax systems
• Financial considerations on building your investment portfolio

Register now to secure your seat.
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Australian and US tax webinar- Retirement Planning for US and Australian residents.

We recently joined John Versace CFP® to discuss the Australian and US tax planning considerations for retirement including 401k/IRA and superannuation.

Please find a copy of the webinar outlined below.

Apt Webinar - Retirement Planning

We are hiring!- If you are looking for an opportunity in the Australian international tax/expat tax space and have some Australian international tax experience, please get in touch for a chat.

Tax Implications of transferring a UK Pension to Australia.

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Section 99B and Foreign Trusts- how does it apply to Australian Expats?

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