Watch out if you are an accidental dual citizen
It is not just Australian politicians who are shocked to discover they are dual citizens. There are plenty of unsuspecting dual citizens finding themselves in hot water. While politicians have been kicked out of parliament, other dual citizens face big bills for taxes they never dreamed they owed.
Depending on your dual citizenship, you could be obliged to pay tax on your income, capital gains tax when you sell your principal property and investment properties, plus tax on the earnings from your self-managed superannuation fund (SMSF). Australians don’t have to pay inheritance tax but other countries aren’t so lenient.
Born in the USA
Martin* was eight when he left the US with his family and moved to Australia. He has been back three times to visit and is now 52. It wasn’t until he was filling out some investment forms for his SMSF that he realised he had a big problem. The global investment bank asked for his renunciation of US citizenship form when it saw on Martin’s passport that he was born in the US. Martin didn’t have one. He had kept his US citizenship even though he was an Australian citizen because his US passport allowed him to access shorter immigration queues at the airport.
As a high-income earner, Martin realised he could be liable for US tax on his income in Australia, as well as his superannuation under the US grantor tax rule. He might also have to pay capital gains tax on Australian property he has sold over the years. A quick internet search revealed that he should have been filing expatriate tax returns with the US government every year, and he was required to submit a return disclosing assets held in his bank accounts.
“I can’t believe it. I had no idea. I don’t know what to do,” says Martin. He was paying tax in Australia and never thought he would be liable for US tax.
Accidental citizens
Denne historien er fra August 2019-utgaven av Money Magazine Australia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra August 2019-utgaven av Money Magazine Australia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
