The short answer: Do not declare yourself resident or foreign resident from the ticket date alone. Apply the ATO residence tests to the whole family and living arrangement, record the date any status changes, review capital gains at that point, and coordinate Australian and destination tax before selling assets or changing how you work.
Work out tax residency from the real living arrangement
The ATO says tax residency may differ from immigration status and uses four tests: the resides test, domicile test, 183-day test and Commonwealth superannuation test. A family that leaves temporarily without establishing a permanent home elsewhere may remain Australian resident for tax purposes; a long-term move with a settled home and ordinary life overseas may point the other way.
No single fact settles every case. Intended duration, overseas housing, family location, work, assets, social ties and the Australian home all help describe where life is actually based. A treaty can also decide residence between Australia and another country when both domestic systems initially treat someone as resident.
- Record departure and return dates for each adult, including work performed during visits.
- Save destination visas, housing, school, employment and ordinary-life evidence.
- Describe what happens to the Australian home and why any family member remains behind.
- Use the ATO leaving-Australia residency tool, but seek advice where the facts are mixed or valuable assets are involved.
Understand what changes if you become a foreign resident
An Australian resident generally declares worldwide income. A foreign resident generally declares Australian-sourced income such as Australian rent, employment performed in Australia and capital gains on taxable Australian property. Foreign residents do not receive the resident tax-free threshold and can claim exemption from the Medicare levy for their foreign-resident days, subject to the return requirements.
Interest, dividends and royalties can move into withholding-tax treatment when paid to a foreign resident. Tell the payer or financial institution your genuine tax residence and overseas address so the right withholding and reporting route can be used.
Worth knowing: Becoming a foreign resident does not necessarily end Australian tax returns. The answer depends on Australian-source income, reportable gains and other filing rules for that year.
Review capital gains before the residence change
When an individual stops being an Australian resident, CGT event I1 can treat many assets that are not taxable Australian property as disposed of at market value. An election may allow the gain or loss to be disregarded, but that changes the later Australian CGT treatment. Australian real property and certain related interests remain within the taxable Australian property rules.
Get a defensible valuation and asset schedule before records become difficult to reconstruct. Shares, managed funds, employee equity, a business and crypto can all need separate analysis. The destination may use a different cost basis or acquisition date, so an Australian election should not be made in isolation.
- List each asset, owner, purchase date, cost base, current value and unrealised gain.
- Identify taxable Australian property separately from other CGT assets.
- Save market valuations and the advice supporting any CGT election.
- Check whether the destination gives credit or matching basis for Australian tax.
Treat the Australian home as a tax decision, not only a housing decision
A former home can sometimes continue to be treated as a main residence for Australian CGT while it is rented or left unused, but a person who is a foreign resident when the property is sold is generally unable to claim the main-residence exemption unless the limited life-events test applies. That can make the residence status on the contract date important.
For contracts from 1 January 2025, the foreign-resident capital gains withholding regime applies at 15% to Australian real property without the former $750,000 threshold. An Australian-resident vendor normally needs an ATO clearance certificate to prevent withholding; a foreign-resident vendor may apply for a variation where appropriate. Withholding is not necessarily the final tax bill.
Keep study loans and the departure-year filing on the calendar
People with HELP, VSL, AASL and other covered study or training loans can have obligations after moving overseas. If you intend to reside overseas for 183 days or more in any 12 months, the ATO says to update contact details and submit an overseas travel notification within seven days of leaving, then report worldwide income or lodge a non-lodgment advice as required.
For the departure-year return, record the residence period accurately, include the information relevant to each period and keep the assessment. Review PAYG instalments, private health reporting, rental schedules and address details rather than assuming the final Australian payslip closes the year.
The Australian tax questions to settle before leaving
Use this as an adviser briefing. The right treatment depends on ownership, dates, destination rules and the evidence behind the move.
| Question | Why it matters | What to save |
|---|---|---|
| When does residence change? | It controls worldwide income, rates, Medicare levy and CGT | ATO test result, advice, travel and home evidence |
| Which assets face CGT event I1? | A deemed disposal or election can affect later tax | Asset schedule, cost base, valuation and election |
| Will the Australian home be sold or rented? | Foreign-resident main-residence and withholding rules can apply | Valuation, contract, lease, costs and clearance or variation |
| What income remains Australian-source? | Rent, local work and businesses can still require returns | Statements, contracts, invoices and withholding |
| Is there a study or training loan? | Notification and worldwide-income reporting can continue | Loan balance, travel notification and yearly submission |
| Can both countries tax the same item? | Treaties and foreign tax credits may affect relief | Destination advice, assessments and proof of tax paid |
Put the work in a sensible order
Before fixing the move date
Map residence facts, assets, property and work in both countries.
Before major transactions
Model CGT, withholding and destination treatment before selling or restructuring.
Within the required departure window
Update ATO contact details and complete any study-loan travel notification.
At each filing cycle
Reconcile Australian and destination returns, credits, withholding and residence evidence.