{"id":6828,"date":"2023-02-20T14:15:00","date_gmt":"2023-02-20T14:15:00","guid":{"rendered":"https:\/\/csttax.com\/en-au\/?p=6828"},"modified":"2023-07-11T05:09:47","modified_gmt":"2023-07-11T05:09:47","slug":"key-tax-issues-you-need-to-consider-when-arriving-in-a-new-country","status":"publish","type":"post","link":"https:\/\/csttax.com\/en-au\/blog\/key-tax-issues-you-need-to-consider-when-arriving-in-a-new-country\/","title":{"rendered":"Key tax issues you need to consider when arriving in a new country"},"content":{"rendered":"\n<p>Similar to the need for you to plan your departing tax issues on the way out of your home country there is a major need to plan what your tax profile will be when you arrive in your new country.&nbsp;<\/p>\n\n\n\n<p>Sometimes, however, it is easy to assume that arriving in another country has no tax consequences and that can make things difficult.<\/p>\n\n\n\n<p>A recent client example springs to mind.<\/p>\n\n\n\n<p>David Smith (not his real name), an expat relocating from Singapore to the US (upon his retirement), decided to access his Australian superannuation fund.<\/p>\n\n\n\n<p>What a mistake that was.<\/p>\n\n\n\n<p>In Australia, pension payments for those over 60 years of age are tax free.<\/p>\n\n\n\n<p>This is, however, not the case in the US.<\/p>\n\n\n\n<p>David had worked out that he and his wife could afford to live in the US the way they envisaged, based on paying no US federal or state tax.<\/p>\n\n\n\n<p>They were quite shocked when we told them that the US would tax David\u2019s Australian-sourced pension stream.<\/p>\n\n\n\n<p>It was not a great conversation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Items To Consider <\/strong><\/h2>\n\n\n\n<p>Set out below are some of the key things you need to consider ahead of your arrival:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Complying with the requirements of more than one tax jurisdiction (are tax credits available for any foreign tax paid?)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Accounting for a new tax and legal system (are you moving to a country that has a civil law regime or a common law regime?)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Understanding the tax issues associated with moving to the arrival country (does the country you are moving to have a general anti avoidance regime that targets tax planning?)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Considering how foreign assets are accounted for (is foreign income exempt or is it non-taxable there is a big difference between the two)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Locating other professional service providers to work with (do not assume your foreign tax advisor has international tax experience as this is often not the case)<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Will Your Assets Be Treated?<\/strong><\/h2>\n\n\n\n<p>In some jurisdictions the moment you arrive in the country you are treated as having bought all your foreign assets at the market value of the date you became a tax resident.<\/p>\n\n\n\n<p>This means that a \u2018cost base\u2019 has been established for your foreign assets.<\/p>\n\n\n\n<p>Then when you sell those assets in future \u2013 a gain or loss can be worked out in relation to those assets. Australia is one such jurisdiction that treats your assets this way.<\/p>\n\n\n\n<p>Other jurisdictions such as the US \u2013 do not give you this \u2018step up\u2019 in value.<\/p>\n\n\n\n<p>This is a serious problem as you can end up paying a lot of tax to the Internal Revenue Service \u2013 based on the original cost of your assets which may have been many years ago.<\/p>\n\n\n\n<p>This is grossly unfair, as most of any gain will have happened while you were a US non-resident \u2013 particularly if you sell the asset shortly after you arrive in the US (you may want to sell foreign assets to buy a house in the US for example!)<\/p>\n\n\n\n<p>Your arrival must be carefully planned as the ramifications of an ill-prepared arrival can be costly.&nbsp;<\/p>\n\n\n\n<p>If you undertake a proper tax planning exercise before you leave, then the thrill of arriving in your new country is not shaken up by the bad news of unintended tax issues.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Similar to the need for you to plan your departing tax issues on the way out of your home country there is a major need to plan what your tax profile will be when you arrive in your new country.&nbsp; Sometimes, however, it is easy to assume that arriving in another country has no tax [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":6831,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[20,26,15,35],"tags":[],"class_list":["post-6828","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-australian-moving-abroad","category-australians-returning-home","category-expats-moving-to-australia","category-global-mobility"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - 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