Bank accounts and tax

[bbop]

Can someone please answer the following question: If we open a bank account before we arrive in Australia, would we have to pay tax at the end of the tax year? We do not know when we will be leaving, possibly only end of next year. We currently do not pay tax as we are in the Middle East and have also officially emigrated from South Africa. I am aware of the 12 month clause, but we are looking into banks that you get both here and down under.Thanks.

[chzaau]

Is it interest bearing?

[bbop]

Have not decided yet. I know as we won't have a TFN yet will pay something like 46% on the bank side (not the problem though) if we do go down this route, would it mean filling in a tax return - we are trying to avoid this as we do not know when we will eventually arrive.

[HadEnoughofJuju]

Most banks that you can open a bank account with from overseas will give you 12 months tax free and the accounts are non interest baring. You have to supply the bank with a TFN within those 12 months otherwise they will withhold tax at the maximum tax rate.

I would guess that a bank that has branches in both the middle east ant and Australia would treat the account when you move as a type of "inter branch transfer" and you would pay the tax that was applicable for the country you are living in.

If you use a bank that only has branches in Australia you will need to arrive within 12 months of opening the account. That's what our migrant banker told us when I opened our account from RSA.

[Gerhardk]

It seems as if your question can cover two areas 1) the source of interest 2) tax resident in Australia.

My understanding is that if you are not an Australian tax resident then income from sources in Australia will be subject to tax in Australia. Example is interest on Australia bank account. Generally if you are a non-resident then a final withholding tax will apply. If you are also taxed in another country then normally you can utilise the credit agains the tax you are paying in that country.

If you are a tax resident in Australia then you will pay tax on your worldwide income. Normally of you are on a PR visa and enter the country you will be a tax resident from that day onward. However there are allowances for people on 457 type visa whom are temporary tax residents.

So it is unlikely that Australia will tax you on your worldwide income, based on the facts you gave. However, any interest will be subject to tax whether you are a resident or not.

Please keep in mind that whether you are a tax resident of any country can be very fact intensive, even if you are not present or have emigrated, you may be a tax resident. But that is a long story.

[bbop]

This whole tax thing is just confusing. I just hope we get no surprises when we make our final arrival!

[bbop]

Got an email from Bankwest this morning. They say I can open an account from overseas and unlike other banks, do not have a time limit (normally 12 months) to identify myself. We are however only allowed to open a transactional account (no interest earned) or a solid gold saver. If you don't have a tax number you will pay the 46.5% tax on solid gold saver. (min balance is$10,000.00).

[Gerhardk]

Tax and death is certain but death is not complicated. Every Government wants their share.

ZAR100k is a lot of money. Why do you want to open a bank account in Australia so long in advance?

[CLAREandANDRE]

ANZ does not have the minimum $10k deposit amount. No Aussie TFN would mean you would be charged resident withholding tax. on the interest earned. Our financial year is 1st July to 30 June. Accountant advice would be best