ATO Tax Submission

[dme]

I have tried finding a definitive answer to my questions on the web without much luck. I am hoping someone on this forum can assist. I have a number of investments that I purchased through platforms like Foord and EasyEquities over the years. I am now filling in my first ato return after having lived in Australia for the 2017/18 tax year. 

 

1. Do I need to declare dividends and interest earned from the SA equities? I assume the answer to be yes.

2. Since the tax years are different in SA to Aus, must I manually add up all transactions for dividends, and the all the tax that was withheld for the Australian tax period?

3. Do I need to break it down to each equity, platform or just lump it all under South African equities?

4. Do I need to declare any dividends from my tax free savings account in South Africa?

5. Is there anything else I should be aware of?

 

i am filling in the form by myself and don’t want to be fined for failure to answer questions correctly.

[blung]

Why don’t u just get a tax guy to assist you 1st time around, spend $200 and get it done correctly and then you can see how do it properly for future submissions?

[dme]

That is an option but I prefer to do things on my own... I learn more that way, doing my own research etc, and might even save $200. 

[Brad76]

30 minutes ago, dme said:

That is an option but I prefer to do things on my own... I learn more that way, doing my own research etc, and might even save $200. 

You may, but that comes with acceptance of the risk that you may get it wrong. !

[RYLC]

On 8/7/2018 at 9:10 PM, dme said:

I have tried finding a definitive answer to my questions on the web without much luck. I am hoping someone on this forum can assist. I have a number of investments that I purchased through platforms like Foord and EasyEquities over the years. I am now filling in my first ato return after having lived in Australia for the 2017/18 tax year. 

 

1. Do I need to declare dividends and interest earned from the SA equities? I assume the answer to be yes.

2. Since the tax years are different in SA to Aus, must I manually add up all transactions for dividends, and the all the tax that was withheld for the Australian tax period?

3. Do I need to break it down to each equity, platform or just lump it all under South African equities?

4. Do I need to declare any dividends from my tax free savings account in South Africa?

5. Is there anything else I should be aware of?

 

i am filling in the form by myself and don’t want to be fined for failure to answer questions correctly.

 

I worked in accounting and tax in Australia at one time and your situation would benefit from using a tax agent for the first tax return at least. The Australian tax system is one of the most convoluted out there with many grandfathered situations, nuances and areas of interpretation required from the tax agent. A good tax accountant could also offer advice on your setup with suggestions on more tax effective processes for the future. I definitely would not define your tax return as straight forward, particularly with currency conversions and different tax years in the picture. For instance one of the things that you might not know is that the ATO has "deemed" currency conversion rates that they publish for use in tax matters. These rates can sometimes be more favorable than the bank rate and you can opt to use them for tax purposes. 

[CyberJoe]

I would definitely recommend making use of a tax consultant (you can deduct the expense) not only because of the tax complexity but also because the ATO filing site definitely has a few bugs in it if you have something more than just salary income. We're saving for a house deposit and as such, we are getting a bit of interest paid to us and it has also been a fairly good year for investments (Although, not good enough for a Sydney house yet 😭). For some obscure reason the ATO site pre-populated everything relating to interest but then added multiplied it all by 12 when calculating my tax liability? Got a nasty surprise but they were kind enough when I contacted them. Stated I should just file an amended return. Sure enough, changed nothing, went to the relevant fields and it filled correctly second time around but now our investments are a bit messed up?? Still waiting to get the amended return validated but have already contacted a tax agent for another amendment. Don't mind learning the tax rules but don't want to muck around with a faulty website.

[ottg]

Seeing that you are reluctant to pay a tax adviser here is my 2c on it.

You pay tax in the country of residence when income has been earned/obtained (in any form)

So for the 2 different tax years SARS/ATO (as you arrived in May 2017), you need to submit a tax return in RSA 2016/17 (which I assume you have done). For the few months till 30 June 2017, you should have submitted an ATO tax return (even if you weren't earning any income i.e nil return) Then for the current tax year 7/2017 to 6/2018 you submit an ATO tax return. You have to ensure that all your tax affairs are up to date in RSA. If so,  then deregister at SARS by letting them know that you are residence in Australia and has immigrated and pay taxes in Australia. SARS may ask for proof of residency and ATO registration and that you pay tax in Australia.  This certificate you obtain from the ATO. 

 

1. Do I need to declare dividends and interest earned from the SA equities? I assume the answer to be yes.

Yes, you obtain your equities tax certificate from the trading service provider for the relevant year eg SAXO

2. Since the tax years are different in SA to Aus, must I manually add up all transactions for dividends, and the all the tax that was withheld for the Australian tax period?

Yes, you have to do proportionment if applicable. If a portion is paid at SARS and that period falls within the time period resident in Aus you deduct that from your tax payable to ATO

SARS and ATO have a mutual tax agreement to avoid double taxation.

3. Do I need to break it down to each equity, platform or just lump it all under South African equities?

As you will be able to get your equity tax certificate from each service provider/platform separately you list them as different income streams but summarised. But you dont think you need to break it down to individual equities.

Should the ATO query that then you have the proof based on the certificates obtained.

4. Do I need to declare any dividends from my tax free savings account in South Africa?

As its a savings account do you actually mean interest received? It may be tax-free in RSA but not in Aus. In Aus all income is taxable. Interest received is taxable in Aus. Also, it depends where you were resident at the time?

5. Is there anything else I should be aware of?

 

Note not all tax consultants will be aware of the SARS obligations so speak to someone which is familiar with both countries eg @Gerhardk

 

 

[Gerhardk]

Some good suggestions and answers here already especially @ottg and Yes we know each other!

 

My views:

1 Yes include. May receive some relief if you pay normal tax in RSA - see double tax agreement.  Keep in mind Australia does not have tax free threshold for interest income and dividends are treated very differently here.

2 In theory yes. So you should be paying tax on RSA income for say March 2017 to June 2017 in Australia when you lodged your ATO 2017 return - say May 2018.  This is usually long before you include that income in SARS Feb 2018 return. But once you lodge that SARS 2018 return and pay tax on any item included in ATO 2017 return, you should revise your ATO return and claim the tax credit.  In practice the ATO allows different year-end calculations in some instances but there are a few limitations to that.

3 Yes you should have all the detail and do proper FX conversions but on ATO return you just declare income, taxable income and tax credit.

4 Yes

5 Yes, to list a few : Consider any cost to hold investments such as interest, bank charges, subscriptions. Keep in mind capital gain / loss on any disposal in RSA and in Australia and the corresponding tax credit.

 

Also see this ATO link : https://www.ato.gov.au/individuals/international-tax-for-individuals/investing-overseas/