Super Not So Duper for Expats

Australian expat executives often make the ideal recruits to run Australian companies. They have had broad exposure to global business practices, and are culturally attuned to the home as well as international markets. But, as we have noted before, our tax system does them no favours.

The new superannuation changes announced by the Treasurer on September 5 do not make it any easier to recruit executive expats. Generally, these expats will have accumulated global assets worth millions. Some of these millions will have been accumulated in foreign pension plans.

Unlike foreign national executives being recruited to run our companies (see HERE), Australian expats will have to pay relatively high income tax on these assets’ earnings.

Under the new rules, a returning executive expat transferring offshore pension assets to a local fund will be taxed on these assets at the top marginal rate for amounts in excess of $1 million to June 30, 2007, or $450,000 thereafter.

The new superannuation rules only confirm that any expat returning to run local companies has, perhaps, a love of country that outweighs economic considerations. For those offshore expat executives driven by economic considerations, it may be best to forego Aussie citizenship and return as a foreigner on a temporary residence visa.

© Guerdon Associates 2024
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