18/11/2025
The article below explores some of the current tax issues for US expats relocating to Australia.
If you are a US expat relocating to Australia, there are a number of important expat tax issues to consider in making the move down to Australia from both an Australian and US tax perspective.
We have outlined some of the important tax considerations below:
Retirement Planning – how will your US 401k/IRA be taxed when relocating to Australia and does it make sense to contribute to your US Retirement Plans or Australian Superannuation going forward? Generally speaking, it can be problematic for US citizens to contribute to Australian superannuation so it is important to best consider how to contribute to your US plans or other investments which offer more favourable tax treatment.
ASX Investments vs US based investments – Australian ASX investments are offered favoured for Australian investors seeking income in retirement due to the franking credit system in Australia. However certain Australian ASX ETF’s or ASX listed mutual funds may be considered Passive Foreign Investment Funds (PFICS) from a US tax perspective and face punitive tax treatment from a US tax perspective for US clients.
The Main Home – the purchase and sale of a main residence in Australia in normally free from Australian taxation under the main residence concession. However the US may tax any gain on the sale of the Australian home above $250,000 for individuals or $500,000 for married couples. Accordingly, it would be important to consider how to best structure the purchase of an Australian property and how to best optimise offset accounts and mortgages.
Estate Planning and the use of a Trust. Should you consider the use of as US Trust or Australian Family Trust for estate tax and income tax planning purposes? This is a common question we receive, and it is never a one size fits all approach. It will depend very much on ones personally circumstances and the nature of the assets in question.
