Leaving Australia permanently involves more than just packing your bags — it includes important tax and financial responsibilities you must address before you go. Whether you are emigrating for work, family, or lifestyle reasons, understanding your obligations to the Australian Taxation Office (ATO) and other government agencies is crucial. This comprehensive guide outlines the key steps to take before departing, how to handle your tax affairs, superannuation, and other considerations to ensure a smooth transition.
Notify the ATO of Your Departure
One of the first and most important steps is to inform the ATO that you are leaving Australia permanently. This affects your tax residency status and how your income will be taxed after you leave.
You can notify the ATO by:
- Lodging a final tax return declaring your departure date
- Completing the “Foreign Resident Capital Gains Withholding” form if applicable
- Contacting the ATO directly via phone or through your myGov account
Determine Your Tax Residency Status
When you leave Australia permanently, your tax residency status will likely change from resident to non-resident. This change impacts:
- Which income you must report to the ATO
- Tax rates that apply to your Australian income
- Obligations around capital gains tax and other liabilities
It is essential to clarify your residency status with the ATO to avoid misunderstandings or penalties.
Lodge Your Final Australian Tax Return
Before leaving, you must lodge a final tax return covering your income up to the date of departure. This includes:
- Employment or business income earned in Australia
- Investment income
- Capital gains or losses
- Any government payments received
Accurately reporting your income ensures proper tax clearance and compliance.
Managing Your Australian Superannuation
Your superannuation fund is an important financial asset to consider before you leave:
- Leaving Australia Superannuation Payment (Departing Australia Superannuation Payment – DASP): If you are a temporary resident leaving Australia permanently, you may be eligible to withdraw your superannuation balance.
- Retaining your super: Permanent residents and citizens generally cannot access super early but can leave it invested in Australia.
- Tax implications: DASP withdrawals may be subject to withholding tax and must be reported appropriately.
Consider Capital Gains Tax (CGT) on Assets
Leaving Australia may trigger CGT events, such as selling property or shares before departure. As a resident, you may be entitled to certain CGT discounts, but non-residents are generally not eligible for these. Planning asset disposals carefully can minimise tax liabilities.
Close or Update Your Australian Financial Accounts
Review your bank accounts, investments, and other financial arrangements:
- Notify banks and financial institutions of your departure
- Close accounts you no longer need or update contact details
- Understand tax obligations on interest and dividends from Australian sources after you become a non-resident
Other Important Considerations
- Medicare and Health Coverage: Inform Medicare of your departure; you may lose eligibility for free healthcare.
- Government Benefits and Pensions: Advise Centrelink or other agencies to stop payments if you are no longer eligible.
- Tax File Number (TFN): Keep your TFN for future dealings with the ATO if you maintain Australian investments or income.
- Estate Planning: Review your will and legal documents to reflect your new residency status and intentions.
Seek Professional Advice
The tax and financial implications of leaving Australia permanently can be complex. Consulting registered tax agents, financial planners, or migration specialists can help you navigate:
- Tax residency status changes
- Superannuation options and tax consequences
- Capital gains planning
- Compliance with Australian tax laws
Conclusion
Leaving Australia permanently involves important tax and financial steps that should not be overlooked. By notifying the ATO, lodging your final tax return, managing your superannuation, and understanding your new tax residency status, you can ensure a smooth transition and avoid future complications. Taking early and informed action, supported by professional advice, will help you meet your obligations and protect your financial interests as you start your new life overseas.
