Australia: personal tax guide

What the tax system covers

Australian residents are ordinarily taxed on worldwide income, while qualifying temporary residents have important exclusions. Tax residence is not simply visa status; foreign-company attribution and departure capital-gains rules require separate analysis.

When you become tax resident

Meeting any one of the ordinary-resides, domicile, 183-day or specified Commonwealth-superannuation tests can establish tax residence. The resides test considers the pattern of life and personal and business ties. Australian domicile ordinarily gives residence unless the permanent place of abode is outside Australia. The presence test has its own usual-abode and intention exception; a stay below 183 days does not establish nonresidence under the other tests. Immigration status and citizenship do not replace this analysis.

Rates and the tax base

0%–45% resident income tax, plus Medicare where applicable. For 2026/27 the first positive marginal band is 15%, then 30%, 37% and 45%. The tax-free threshold, offsets and Medicare rules change effective liability; foreign-resident and working-holiday schedules are distinct.

Private investment gains and business trading

Disposals of investments, including property, shares and crypto assets, can trigger capital gains tax as part of income tax. Exemptions, capital losses and any available holding-period discount affect the result. Business trading stock is governed separately; residence and temporary-resident status can change the assets within scope.

Asset cost basis on arrival

An individual becoming an Australian tax resident, other than a temporary resident, generally acquires covered CGT assets at their market value at that time. Taxable Australian property and pre-CGT assets are excluded.

• Tax-law temporary-resident status changes the result; a temporary immigration visa alone does not settle it.
• If temporary-resident status ends while Australian tax residence continues, non-Australian-property assets generally enter at market value then; employee shares and rights need separate treatment.

Arrival and departure can change gains

CGT event I1 concerns an individual or company ceasing Australian residence. Asset categories, taxable Australian property and individual choices require detailed analysis. Temporary residents have different provisions. Retained Australian real estate and the main-residence exemption can remain significant after departure. A useful comparison therefore models existing assets and future income, rather than just a new country’s headline tax rate.

Temporary-resident status requires its own eligibility review

The tax concept of a temporary resident is not simply any foreigner on a temporary visa. The statutory conditions and spouse-related circumstances matter. Where it applies, much foreign income and gains outside taxable Australian property can receive different treatment, while employment and services require their own analysis. A person can be an Australian tax resident and also qualify for these special rules.

Record the start and end of the status and review any change in visa or family circumstances. When temporary status ends while ordinary Australian residence continues, market-value acquisition rules can affect relevant assets. Obtain valuations at the event, and do not assume that a later accountant can recover a reliable business value from a bank balance.

Treat departure CGT as a decision with future consequences

For relevant assets, CGT event I1 can arise when residence ends without any cash sale. An individual’s choice to disregard the resulting gains and losses can cause the assets to remain taxable Australian property until a later CGT event or resumed residence. Future appreciation and the destination’s tax rules therefore belong in the comparison. The choice should not be described as a permanent exemption.

Prepare an asset schedule separating taxable Australian property, other investments, business interests and assets with special rules. Check capital losses, available concessions, temporary-resident status and the applicable treaty. Personal departure does not automatically migrate an Australian company or change trust treatment. The final plan should distinguish the individual’s calculation, company-level consequences and continuing source-country taxation.

A departure is more than a day count

Determine whether the facts support ceasing Australian tax residence. The intended duration abroad, home, family, continuing ties and actual conduct matter. A second visa, a foreign company or fewer days in Australia does not automatically settle the answer. Record the reasons and supporting evidence at the time of the move.

Establish the residence-change date before valuing the exit

Prepare a chronology covering accommodation, family, employment, travel and the intended overseas home. A visa abroad or a short absence does not itself establish that Australian tax residence has ended. Use the applicable domestic tests and treaty, with specialist review where facts are mixed. The chosen date drives which income and gains fall into the departure period.

Do not confuse the owner’s residence with the company’s. An Australian-incorporated company remains a separate taxpayer, and a foreign company previously controlled from Australia needs a real governance handover if its management changes. Record the authority, people and functions that move, including any continuing Australian office, staff or contract activity.

Compare the CGT event I1 options asset by asset

Compile cost bases and supportable departure-date market values for relevant shares, business interests and other assets. Identify which are taxable Australian property and which fall into the departure-event analysis. A private company valuation should address the actual rights and business, rather than substituting its bank balance or nominal share capital.

An individual can choose to disregard all gains and losses covered by the relevant departure choice, with the consequence that affected assets remain within the Australian CGT rules for later events. Model an immediate tax cost against the future-sale outcome, including subsequent appreciation, capital losses and the destination’s credit and basis rules. The election should not be promoted as a tax-free exit without explaining the later exposure.

Keep a continuing-compliance file after departure

Retained Australian property, business income and investments may remain taxable or reportable. Update banks and payers with accurate residence information and consider the appropriate withholding treatment. Retain the departure calculation, valuations, election evidence, returns and foreign residence documents for the eventual sale or a later return to Australia.

Review trusts, superannuation and employee awards separately rather than assuming every asset follows the ordinary share-investment rule. Ensure someone can receive tax notices and respond to enquiries. For an international group, preserve transfer-pricing and management records on both sides of the move. The practical objective is to know which obligations stop, which continue and which arise only when an asset is sold; leaving the country does not make those distinctions unnecessary.

Foreign companies and income attribution

CFC control and attribution tests can apply to resident individuals and companies, subject to detailed exemptions.

Departure, migration and continuing obligations

CGT event I1 can apply on ceasing residence, subject to asset/status exceptions. An individual deferral choice can preserve later Australian CGT exposure; companies have a separate position.