Australian Government Removes Tax Loophole For Australian Expats

australian expats help debt

The Australian Government has announced they are closing a tax loophole available to Australians living overseas with a student debt or a Higher Education Loan Program (HELP) debt.

Currently if you live overseas (and are a non-resident for tax purposes) there is no obligation to repay the HELP debt you accumulated while studying at university in Australia.  However in the May 2015 Federal budget, the Federal government has announced that Australians living overseas will now be required to repay their HELP loans.

If you are living overseas, and are a non-resident for taxation purposes, there is no obligation to do a tax return, and so there is no way for the Australian government to know if you are earning above the income thresholds that trigger repayment of your HELP debt.  While the administrative details are yet to be finalised, it is envisaged that Australians with an existing or new HELP debt that move overseas will be required to register with the Australian Tax Office, and be required to declare their worldwide income every year.   If your worldwide income exceeds the income threshold for repaying your HELP loan, you will be required to make the relevant payment to the Australian Tax Office.

Repayment obligations will commence from 1 July 2017 based on the debtors worldwide income for the 2016-2017 tax year.

While on the face of it, this change might appear to be reasonably fair, it is going to add enormous complexity for many Australian expats who currently don’t declare their foreign income to the Australian Tax Office.

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Disclaimer : The information contained on this website is intended only as general commentary and does not purport to be comprehensive.  No warranty is provided as to the accuracy.  It should not be regarded as tax, financial, or legal advice and you should seek professional advice before taking action.

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Craig is an Australian Expat and the founder of The Australian Expat Investor. Craig is passionate about investing, and while Craig cannot give personal financial or tax advice, Craig enjoys sharing investing, tax, and other tips for Australian expats to help them to build their wealth while living abroad and get the most out of their time living overseas. Get his free ebook on 9 Financial Surprises That Could Cost Australian Expats Thousands of Dollars

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