Do I Pay Tax on the Money I Transfer?As a tax resident of Australia, you are normally liable for income tax on all your worldwide earnings from the date you become a tax resident.
This can cause some concern to new migrants, as they will be bringing their worldly wealth into Australia and worry they may have to pay tax on it.
The process of transferring money from your homeland, converting to Australian dollars and depositing into an Australian bank account does not generally constitute income - it's money you already owned - so usually no tax is due on it.
What if I Delay Transfer?
This is where it could get more complicated. Say, on the day you arrive in Aus, you have £100,000 sitting in your UK bank account, and it's worth $180,000 (exchange rate 1.80). You don't like that rate, so you wait a few months, the exchange rate improves to 2.00 and then you transfer, receiving $200,000. You may have made a taxable 'foreign exchange gain' of $20,000 on the transaction *. If you had made a 'foreign exchange loss' then that may be an allowable loss to be offset against your other income.
Is There an Exemption Period?
We have searched the ATO website (www.ato.gov.au) and cannot find any mention of an exemption period.
* Please note - this content is our interpretation of the tax situation from researching the ATO website - we are not tax experts and we are not giving specific advice - We recommend you do your own research and obtain professional advice.