Non-Resident

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FTA

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I saw a post a while back saying that the only legal way to not pay tax is to become a non-resident, which sounds about right.
The general consensus was that whilst this sounds good, people generally don't want to live in most tax-free countries, which I tend to agree with also.

I am Australian and my wife is Irish. We are self-funded retirees who had planned to move to Australia (and pay tax) but they rejected my wife's application, so I came up with another plan which might turn out to have a nice silver lining.
My new plan is to transfer all of our wealth into her name (including liquidating everything in Australia) and get my wife a tourist visa for Australia. We will then spend enough time out of Ireland each year to qualify for non-residency (183 days per year or 280 over 2 years I believe). We will be in Australia long enough to be classed a residents for taxation purposes, but given that my wife will be on a tourist visa this will not apply to her.

There are obvious flaws in my plan.
The big one is getting the tourist visa. It will be easy for a while until they start asking questions at Australian immigration. But she has a good argument, visiting family in Australia, not intending to work in Australia etc. We will also need to behave like tourists, which won't be that hard given that we are now effectively on a permanent holiday anyway. 6.5 months in Australia on holiday every year, 4.5 living in Ireland, and 1 month in transit sounds reasonable to me.

But I am guessing that if the Aussie tax man gets wind of my situation, he ain't going to like what he hears, and is going to be straight on the blower to the Irish tax man to have a whinge. They will then come up with a plan to screw me.

So the simple question is, will my wife need to pay tax?
 
The Irish residency test is a simple days test as you described above - so if your wife is not here for the prescribed day limits, she will not be liable for income tax in Ireland (as long as she doesn't work while she is here). She will still be liable to capital gains tax on any gains (which are presumably part of the annual investment return on your pension assets) until she become not ordinarily resident (after 3 full years of being non-resident). Have a look at Revenue's Res1 information for complete info. http://www.revenue.ie/en/tax/it/leaflets/res1.html

You should probably ask on an Australian website about the Australian tax aspects.

[PS it seems very strange that your own country won't let your wife move there to live with you - could you reapply when the assets are in her name so she will clearly not be a drain on society?]
 
Thanks orka,
Yes it's strange, but their decision, and their loss. She's finished with them now.
Btw, I'm not transferring everything to her name to make her a more attractive immigrant (she was already much more attractive than most) It is so I don't have to pay any personal tax in Australia, and as a bonus I will get the pension. Being a tourist, she won't be liable for personal tax either. But she will be spending a lot of money there!
On a side note the Australian government are so desperate for cash, they are going to start taxing backpackers 32.5% from 1st July, which I think is disgusting. It will collect hardy anything but will do untold damage to the tourism and fruit picking industries.
These are the sort of idiots running the country, that don't deserve my tax!
 
FTA said:
We will then spend enough time out of Ireland each year to qualify for non-residency (183 days per year or 280 over 2 years I believe). We will be in Australia long enough to be classed a residents for taxation purposes, but given that my wife will be on a tourist visa this will not apply to her.
Click to expand...

This is a big presumption on your part and I doubt it is accurate. I highly suspect that if she in Australia for over half the year and not resident elsewhere she will owe Australian taxes on her income (which are at least lower than Irish ones). I'd check with an Australian accountant/lawyer as to your plan, as it could get very messy.
 
blorg said:
This is a big presumption on your part and I doubt it is accurate. I highly suspect that if she in Australia for over half the year and not resident elsewhere she will owe Australian taxes on her income (which are at least lower than Irish ones). I'd check with an Australian accountant/lawyer as to your plan, as it could get very messy.
Click to expand...
After a bit more research, my presumption was not entirely correct. As a non-resident she does not have to pay Australian tax. However, the tax treaty requires that she pays tax in either Australia or Ireland. Not a show stopper, but means that she cannot legally avoid paying tax.
 
FTA,

The criteria used to determine tax residency in Australia are not the same as those used by the Department of Immigration and Border Protection. An individual might be resident for tax purposes even if he or she is not an Australian citizen or permanent resident.

[broken link removed] might help you to determine you and your wife’s residence position for tax purposes in Australia.

It is only when this has been established that you then need to consider the [broken link removed], which depends on the nature of both of your incomes and assets and the periods spent in both countries.
 
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Thanks Sophrosyne,

Yes, the Australian tax office are quite vague when it comes to determining tax residency, and cannot be held to their own time-out-of-country caveats. However their website clearly states that if you "are either holidaying in Australia or visiting for less than six months" you are "a foreign resident for tax purposes". It becomes a bit vague for those staying more than 6 months, but essentially comes down to if you live in one location.
They then turn to the tax treaty to ensure that if you are not paying tax in Australia, then you had better be paying it in Ireland. I reckon it would be a good idea to be paying some tax in Ireland in this case.
 
Yes, I agree that the Australian tax residency tests are – rather oddly - administratively subjective, since they depend not only on the 6-month rule but also on domestic and economic behaviour in Australia.

Irish tax residency rules are more straight-forward and follow the OECD model.

I think, therefore, that you might be better advised to look to an experienced Australian tax practitioner.
 
Not many people know that.. You know your stuff.
Good tax agents are hard to come by.
I still trying to find a good Irish one.
 
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