NZ Citizen and Aus dividends

Discussion in 'Accounting & Tax' started by inbaaa, 16th Jun, 2021.

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  1. inbaaa

    inbaaa Active Member

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    Hi,
    My parents are retired NZ Citizens living in NZ. When they lived with me in Australia for 3 years, they bought australian shares (VAS). Now theyve moved back to live in NZ.

    Do they have to file a tax return in Australia even though they dont live in Aus anymore? Assuming a tax return is required if they need to get the VAS's franking credits back from the ATO.

    Do they have to declare the aus dividend income when they file tax return in NZ?

    Any pointers are appreciated!
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    When a person ceases to a tax resident of Australia they face a choice
    1. Declare the CGT at the date they depart and pay AU CGT or
    2. Defer until they sell...BUT....The final selling price while non-resident might apply !!

    VAS arent a share. Its a ETF. Franking credits are part if the story. Non-residents cant get franking credits but while remindent they may. Note also there are CGT issues involved in the annual tax statements issued by VAS which alter the costbase.
     
  3. Beano

    Beano Well-Known Member

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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    That up to them to consider. Your tax residency

    A person who arrives in Austraia and resides 183 days is a tax resident of Australia.
     
  5. inbaaa

    inbaaa Active Member

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    My parents were in Australia for 3 years before they relocated to NZ.
     
  6. inbaaa

    inbaaa Active Member

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    Thanks for the reply @Paul@PFI

    Didnt understand what you meant by remindent - did you mean resident?
     
  7. inbaaa

    inbaaa Active Member

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    That is good to know!! So if my parents (NZ citizens but non-residents of aus) dont intend to sell the VAS units, are they required to file tax return in Australia to declare the VAS dividend income even though they are not residents of australia? Thanks in advance!
     
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    VAS income is likely not assessable income to a foreign owner BUT some of it could be (trust income element BUT not franked distributions and NOT CGT elements. Withholding may apply to interest and unfranked elements). Important Vanguard know they are not AU tax residents so they withhold on behalf of ownert IF it applies. The franking credits etc may be lost of course.
    Citizenship has nil to do with any issue. They can be Chinese citizens and same rules apply based on being resident for tax purposes in NZ.
     

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