As an Australian permanent resident, you generally need to declare inherited property from overseas in Australia, especially if there is rental income or any other income derived from that property. Here are some key points to consider:
-
Residency Status
If you are a permanent resident of Australia, you are considered a resident for tax purposes. Australian residents are taxed on their worldwide income, which includes income from overseas property.
-
Rental Income
If you inherit property overseas and receive rental income from it, you are required to declare this rental income on your Australian tax return. The income should be reported in Australian dollars based on the exchange rate at the time the income was earned.
-
Capital Gains
If you sell the inherited property overseas and realize a capital gain, you may also have Australian tax obligations on the capital gain. Australia has rules for calculating capital gains tax on foreign assets, and there are provisions to reduce or eliminate double taxation through tax treaties.
-
Foreign Tax Credits
You may be eligible for foreign income tax offsets or credits for any tax paid overseas on the inherited property income. This helps prevent double taxation.
-
Reporting Requirements
It's important to keep records of the inheritance and any income derived from the inherited property. When filing your Australian tax return, you should accurately report all relevant income and gains from overseas assets to comply with Australian tax laws.
If you have inherited property from overseas and are unsure about how to report it or any tax implications, consulting with a registered tax agent or the Australian Taxation Office (ATO) can provide tailored advice based on your specific circumstances.