Tax in Australia for expats starts with one question: are you an Australian resident for tax purposes? Residents are generally taxed on their worldwide income at marginal rates of up to 45%, with a 2% Medicare levy generally applying on top, while temporary residents, broadly people on temporary visas whose spouse is not an Australian citizen or permanent resident, are generally taxed only on Australian income and on gains on taxable Australian property, such as Australian real property. For British expats moving to Australia from the UK, the UAE or elsewhere, the answer shapes how UK pensions, UK rental income, ISAs, offshore investments and future gains will be taxed. This guide explains the residency tests, the resident and foreign resident rates, the temporary resident rules, capital gains tax on arrival and departure, how UK pensions and superannuation fit in, the rules on buying and selling Australian property, and the UK points that continue after you leave. It is general information, not personal tax advice. Australian figures are for the 2025 to 2026 and 2026 to 2027 income years (Australia's income year runs from 1 July to 30 June) and UK figures for the 2026 to 2027 tax year, the information was reviewed on 4 November 2026, and rates, caps and thresholds should be rechecked before you rely on them.
The Australian Taxation Office (ATO) applies four tests, and you are a resident if you meet any one of them. The primary test is the resides test: if you live in Australia in the ordinary sense, taking into account factors such as physical presence, intention, family, work and business ties, where your assets are and your living arrangements, you are a resident and the other tests do not need to be applied. If you do not meet the resides test, you can still be a resident under the domicile test, where your domicile (your legal permanent home) is in Australia, unless the ATO is satisfied your permanent place of abode is outside Australia; the 183 day test, where you are in Australia for more than half the income year, unless your usual place of abode is outside Australia and you do not intend to live there; or the Commonwealth superannuation test, which applies to certain Australian government employees posted overseas. The ATO's detailed view of the tests is set out in Taxation Ruling TR 2023/1. Many people who move to Australia to live and work meet the resides test from the date they arrive, so residence often starts from arrival rather than after 183 days, although the facts in each case decide the position. Where you are also resident in the UK under its own rules, the tie breaker in Article 4 of the UK and Australia double taxation convention looks in turn at where you have a permanent home, your centre of vital interests and your nationality, and, failing those, leaves the question to mutual agreement between the two tax authorities. UK residence is decided separately by the UK Statutory Residence Test, as our guide to the Statutory Residence Test and split year treatment explains.
Australian residents are taxed on worldwide income. For the 2025 to 2026 income year, the resident rates are nil on the first $18,200 of taxable income, 16% from $18,201 to $45,000, 30% from $45,001 to $135,000, 37% from $135,001 to $190,000 and 45% above $190,000. Legislated changes reduce the 16% rate to 15% from 1 July 2026, for the 2026 to 2027 income year, and to 14% from 1 July 2027; the other rates and the thresholds are unchanged. A 2% Medicare levy is generally added on top, subject to low income thresholds and exemptions, and a separate Medicare levy surcharge can apply to higher earners who do not hold an appropriate level of private hospital cover. In the year you arrive or leave, the ATO adjusts the tax free threshold for part year residents: for someone who becomes resident during the year it is $13,464 plus $4,736 multiplied by the number of months of residence in that year (counting the month of arrival) divided by 12. Foreign residents have no tax free threshold and, for the 2026 to 2027 income year, pay 30% on taxable Australian income up to $135,000, 37% up to $190,000 and 45% above that, and do not pay the Medicare levy. Employers withhold tax from salaries under pay as you go (PAYG) withholding, and other income, including foreign income, is settled through an annual tax return. If you lodge your own return, it is generally due by 31 October after the end of the income year, while people who use a registered tax agent can often lodge later. Where you have paid foreign tax on income that is also taxable in Australia, a foreign income tax offset may be available, subject to limits. Recheck the rate table and thresholds each income year.
Many expats arrive on temporary work visas, and this can change the position significantly. The ATO treats you as a temporary resident if you hold a temporary visa and neither you nor your spouse (if any) is an Australian resident under the Social Security Act 1991, which broadly means neither of you is an Australian citizen, a permanent resident or a protected special category visa holder from New Zealand. A temporary resident who is an Australian tax resident is generally taxed only on Australian sourced income, on capital gains on taxable Australian property and, in certain circumstances, on income from employment or services performed overseas while a temporary resident. Other foreign income, such as UK rent, UK dividends, interest on offshore accounts and income from UK pensions, and gains on assets that are not taxable Australian property, generally do not need to be declared. Resident rates still apply to Australian income. The status ends when you or your spouse obtain permanent residence or citizenship, and the ATO notes that someone who has been an Australian resident, other than a temporary resident, at any time after 6 April 2006 cannot later become a temporary resident. Moving from a temporary visa to permanent residence is therefore an important tax date, because foreign income becomes taxable from then and assets held at that point are generally treated for capital gains tax as acquired at their market value on that date, as explained below. It is worth recording values and planning income and withdrawals around that date.
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Australia taxes capital gains as part of taxable income at your marginal rate, and residents can generally reduce a gain by the 50% CGT discount on assets held for at least 12 months. When you become a resident (other than a temporary resident), you are generally treated as having acquired your CGT assets, other than taxable Australian property and assets acquired before 20 September 1985, at their market value on the day you became resident. This means growth before arrival is generally outside Australian CGT, but only if you can evidence the value at that date, so obtaining valuations or statements at arrival can matter. When you stop being a resident, you are generally treated as having disposed of your CGT assets, other than taxable Australian property, at their market value at that time. You can instead choose to disregard those gains and losses, in which case the assets are treated as taxable Australian property until a later CGT event or until you become resident again. Taxable Australian property includes Australian real property, such as a home or investment property, which stays within Australian CGT whether or not you are resident. For assets acquired after 8 May 2012, the 50% discount is reduced or unavailable for periods when you were a foreign or temporary resident, under rules that apportion the discount by reference to your periods of residence. If you are a temporary resident when you stop being resident, you are generally not treated as disposing of your assets. The UK and Australia treaty also contains rules for individuals who defer tax on leaving, so the interaction with your next country of residence should be checked.
Under Article 17 of the UK and Australia double taxation convention, pensions, including government pensions, and annuities paid to a resident of one country are taxable only in that country. Article 18, on government service, covers salaries and similar remuneration other than a pension or annuity, so pensions are dealt with by Article 17. As a result, UK private, workplace and government service pensions may be taxable only in Australia where the recipient is resident in Australia for treaty purposes and the pension is taxable there. Under some other UK treaties government service pensions stay taxable in the UK, so the treaty text and the classification of each pension, which can depend on the scheme and the paying body, are worth confirming rather than assuming. Relief depends on treaty residence and on HMRC accepting the claim, and UK tax may continue to be deducted until it does. To stop UK tax being deducted, you can generally apply to HMRC on its country specific form, Australia-Individual, with certification of Australian residence, so HMRC can issue an NT (no tax) code to the payer; UK tax deducted before then generally needs to be reclaimed. HMRC's GOV.UK page for that form states that holders of a temporary resident visa can claim relief only for income paid before 1 July 2006, so a temporary resident whose UK pension is exempt in Australia should check the position with HMRC, as UK tax may continue to be deducted. The ATO says most foreign pensions are taxable in Australia, with a deductible amount in limited cases; its myTax 2025 instructions, for example, indicate that a deductible amount of 8% of a category A UK State Pension may be claimed, so check the current year's instructions. The UK State Pension can be paid to you in Australia, but it is not increased each year for people living there, because Australia is not on the government's list of countries where annual increases are paid, so the amount is generally frozen at the rate payable when you moved there or first became entitled, if later. Lump sums are treated differently from regular income. A lump sum from a foreign super fund, which can include a UK pension scheme, is generally not taxed in Australia if paid or transferred within six months of becoming resident, but after that the growth since you became resident, called applicable fund earnings, is generally taxable, as our guide to your UK pension and tax position in Australia explains. A transfer without an unauthorised payment charge is only possible to a scheme that meets HMRC's recognised overseas pension scheme conditions, including the pension age test, and those conditions mean an Australian super fund can usually receive a UK transfer only for members who have reached the UK minimum pension age, currently 55 and legislated to rise to 57 from 6 April 2028, subject to protections; eligibility should be confirmed with the receiving scheme. Where you are resident in Australia an exclusion from the 25% overseas transfer charge can apply, although the Overseas Transfer Allowance (£1,073,100 for most people in 2026 to 2027) is still tested, and the two charges are alternatives, not cumulative. Our guide to transferring a UK pension to Australia covers the conditions. A transfer may not be suitable and needs regulated advice that considers alternatives, including leaving the pension in the UK: a transfer can be irreversible, can mean losing UK protections and guarantees, and brings charges, investment, currency and tax risks, so whether to keep or move a pension depends on your circumstances.
Employers generally pay superannuation guarantee contributions on top of salary for eligible employees, including those on temporary visas. Contributions are limited by caps: from 1 July 2026, the general concessional (before tax) contributions cap is $32,500 and the non-concessional (after tax) cap is $130,000, up from $30,000 and $120,000 for the 2025 to 2026 income year. A transfer of foreign pension money into super generally counts towards the non-concessional cap, except for any applicable fund earnings that you elect to have taxed in the fund at 15%. From 1 July 2026, Division 296 adds a further 15% tax on earnings linked to the part of a person's total super balance above $3 million and a further 10% on earnings linked to the part above $10 million, with both thresholds set at those levels for 2026 to 2027. This is not a tax on the balance itself, but an additional tax on the proportion of super earnings attributable to the balance above each threshold. Temporary residents who leave Australia permanently, once their visa has ended, can generally claim their super as a departing Australia superannuation payment (DASP); the tax free component is not taxed, while the taxable component is taxed at 35% on the taxed element and 45% on any untaxed element, or 65% where working holiday maker rates apply; Australian citizens and permanent residents cannot claim a DASP. Super death benefits are another point to check: Australia has no inheritance tax, but the taxable component of a super lump sum paid to a non-dependant, such as an adult child, is generally taxed at a maximum of 15% plus the Medicare levy on the taxed element, and 30% plus the Medicare levy on any untaxed element, according to the ATO. Insurance held inside super also needs checking if you might leave again, as our guide to life insurance inside Australian super explains. Recheck caps and thresholds each income year.
Temporary residents and other foreign persons generally need foreign investment approval before buying Australian residential property, and the ATO states that foreign persons are banned from buying established dwellings from 1 April 2025 to 30 June 2029, after an extension of a ban that was previously due to end on 31 March 2027, subject to limited exceptions, and this includes an established home that a temporary resident intends to live in. Temporary residents can still apply for approval to buy new dwellings or vacant land, and fees apply. Australian citizens, permanent residents and New Zealand citizens on a special category visa are not foreign persons for these rules. On a sale, a foreign resident is generally not entitled to the main residence exemption for property disposed of after 30 June 2020 unless the life events test is met, which requires a continuous period of foreign residence of six years or less and a specified life event such as a terminal medical condition, the death of a spouse or minor child, or a formal agreement after a relationship breakdown. So a home that would have been exempt can become fully taxable if it is sold after you have left Australia. Buyers must also withhold foreign resident capital gains withholding at 15% of the price on all property sold under contracts from 1 January 2025, with no minimum threshold, unless the seller provides a clearance certificate from the ATO, which Australian residents can obtain. Rental income from Australian property is taxable in Australia whether or not you are resident. The timing of a sale relative to a change of residence can therefore make a material difference.
Becoming Australian resident does not end UK tax on UK income. UK rental income remains taxable in the UK, usually through the Non-Resident Landlord Scheme, and for an Australian resident who is not a temporary resident it is also taxable in Australia, with a foreign income tax offset for UK tax paid, subject to limits. A sale of UK property or land is within UK capital gains tax for non-residents, with a return generally due within 60 days of completion, and the gain may also be taxable in Australia, as our guides to the Non-Resident Landlord Scheme and selling a UK property as a non-resident explain. ISAs have no equivalent exemption in Australia, so income and gains inside an ISA can be taxable there for residents who are not temporary residents. Offshore investment holdings also need checking, because some are taxed very differently in Australia, as our guide to offshore portfolio bonds and Australian tax explains. If you return to the UK after a period of non-residence of five years or less, the UK temporary non-residence rules can bring certain gains and income realised while you were away back into UK tax, depending on the type and timing of the gain or income, as our guide to returning to the UK after years abroad explains. Australia has no inheritance or estate tax, and there is no inheritance tax treaty between the UK and Australia. Since 6 April 2025, UK inheritance tax on worldwide assets depends on long-term UK residence: broadly, someone UK resident for at least 10 of the previous 20 tax years is a long-term UK resident, and that status can continue for between 3 and 10 tax years after leaving. UK assets remain within UK inheritance tax regardless, and from 6 April 2027 most unused pension funds and death benefits are legislated to come within its scope, as our guide to inheritance tax on pensions from April 2027 explains. Wills that work in each country where you hold assets are worth reviewing.
In my experience the date people become Australian resident, and whether they arrive as temporary or permanent residents, shapes almost everything else. Asset values on that date, the timing of any pension lump sum and the move from a temporary visa to permanent residence are the points that tend to be missed. It is worth mapping the UK and Australian position before you move; whether any action is appropriate depends on your circumstances, and for some people nothing needs to change.
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Many people who move to Australia to live meet the resides test from arrival. The 183 day test is only one of four tests and is rarely the one that decides residence for someone who has relocated.
Non-Australian assets are generally treated as acquired at market value when you become resident, other than as a temporary resident. Without evidence of that value, it can be harder to show that growth before arrival is outside Australian CGT.
When you or your spouse obtain permanent residence, the temporary resident exemption for foreign income generally ends and assets are revalued for CGT at that date. Timing income, gains and withdrawals around that date can matter.
UK tax free status does not carry over. ISA income and gains, and UK pension lump sums taken more than six months after becoming resident, can be taxable in Australia for residents who are not temporary residents.
Foreign residents generally cannot claim the exemption on property sold after 30 June 2020 unless the life events test is met, so a sale after departure can be fully taxable.
The UK State Pension is not increased annually for people living in Australia, so its value generally stays at the rate payable when you moved there or first became entitled, if later.
People moving to Australia often ask whether to bring their UK pension with them. A transfer is only possible to an eligible scheme and from the minimum pension age, the Australian tax on fund growth depends on timing, and charges, investment risk and the loss of UK protections all need weighing against leaving the pension where it is. A transfer is not suitable for everyone, and the right answer depends on your circumstances in both countries.
Illustrative example only, not a real client. This example is simplified and fictional, applies the Australian rules for the 2026 to 2027 income year and the UK rules for 2026 to 2027 as stated assumptions, ignores currency movements and costs, and is not a guarantee of any outcome. It does not describe advice given to any client, does not represent the experience of actual clients and does not illustrate a recommended course of action. Neil and Claire are British and have lived in Dubai for eight years. They plan to move to Perth in early 2027 on permanent visas. They hold a UK SIPP, a let flat in Manchester, UK shares and an investment portfolio built up while in the UAE. They assumed they would not be Australian tax resident until they had spent 183 days there, that their investments would only be taxed on growth after the move once they started selling, and that Neil could take his UK tax free cash after arriving without any Australian tax.
In this fictional example, a hypothetical review by a regulated financial adviser, working alongside UK and Australian tax specialists, explained that, on these assumptions, they would generally be Australian residents from arrival under the resides test, and, as permanent visa holders, would not be temporary residents. It flagged that their non-Australian assets would generally be treated as acquired at market value on the day they became resident, so obtaining dated valuations and statements would matter; that a UK pension lump sum taken more than six months after arrival could be taxed in Australia on applicable fund earnings; that rent from the Manchester flat would be taxable in both countries, with an offset for UK tax; and that, having lived outside the UK for eight years, the UK long-term residence rules for inheritance tax would need checking. It compared the timing of any withdrawals and sales before and after the move with making no changes.
Illustrative outcome only: this does not assess suitability or recommend any course of action, and no tax outcome, liability or saving is guaranteed. On these assumptions, the issues that would need consideration include their residence start date, records of asset values on arrival, the timing of any pension lump sum relative to the six month window, and how their UK assets sit for UK and Australian tax. Whether any change to how their pensions or investments are held would be appropriate is a separate question needing its own suitability assessment and tax advice, and advice may conclude that no changes are suitable. Different facts, such as arriving on a temporary visa, could produce a very different result.
Illustrative example, not a real client.
Clarity Global Wealth helps British expats moving to Australia, already living there, or planning their next move, understand how Australian and UK tax rules could apply to their income, investments, pensions and estate before they act. We can arrange a free introduction to regulated financial planning; the introduction is an initial conversation, not advice, and places you under no obligation to proceed with advice or any product, so you can review your position with a regulated financial adviser where advice is appropriate. Any charges for advice would be explained to you before you proceed. The value of investments and pension funds can fall as well as rise, tax treatment depends on individual circumstances and can change, and advice may conclude that no changes are suitable. Clarity Global Wealth does not provide tax, legal or accounting advice, and adviser comments in this guide are general information, not personal recommendations. Australian and UK tax returns and tax opinions are work for qualified tax specialists, so where that is needed we coordinate with them.
Related guides: UK Expats in Australia: Your UK Pension and Tax Position, Transferring a UK Pension to Australia, Offshore Portfolio Bonds and Australian Tax, Life Insurance Inside Australian Super, Moving From the UK: The Statutory Residence Test, The Overseas Transfer Allowance and the 25% Charge, Inheritance Tax on Pensions from April 2027 and Returning to the UK After Years Abroad.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
You are generally a resident if you meet any one of four ATO tests: the resides test, the domicile test, the 183 day test or the Commonwealth superannuation test. Many people who move to Australia to live meet the resides test from the day they arrive, rather than after 183 days, but the facts decide each case.
For residents in the 2026 to 2027 income year, rates are nil on the first $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000 and 45% above that, plus a 2% Medicare levy for most people. Foreign residents pay 30% from the first dollar up to $135,000. Recheck the rates each year.
Generally not. Temporary residents are generally taxed only on Australian sourced income, gains on taxable Australian property and, in certain circumstances, income from overseas work done while a temporary resident. The exemption ends when you or your spouse become a permanent resident or citizen.
Under Article 17 of the UK and Australia treaty, pensions, including government pensions, paid to a resident of Australia for treaty purposes may be taxable only in Australia, depending on the pension and your circumstances. An NT code from HMRC, applied for on form Australia-Individual, can stop UK deductions where HMRC accepts the claim, and temporary residents should check whether relief is available to them. Lump sums follow separate Australian rules, including a six month window after becoming resident.
Generally not on assets other than taxable Australian property, because they are treated as acquired at market value on the day you became resident, unless you are a temporary resident. Keeping evidence of that value matters. Australian real property follows the general rules.
No. The UK State Pension can be paid to you in Australia, but it is not increased each year for people living there, so its value generally stays at the rate payable when you moved there or first became entitled, if later.
No. Australia has no inheritance or estate tax, although super death benefits paid to non-dependants can be taxed and CGT can apply when inherited assets are later sold. British expats can still be within UK inheritance tax on UK assets and, as long-term UK residents, on worldwide assets for up to 10 tax years after leaving.
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