Assessable Income

Australian tax residents are in general taxable on their income and capital gains from sources anywhere in the world. They are entitled to offset tax payable in a foreign jurisdiction against the tax payable in Australia, to the extent that it does not exceed the Australian Tax. Any surplus tax paid elsewhere becomes a tax credit which may be carried forward for future use.

Non residents are taxed on income and capital gains from Australian sources only. This may be modified where double taxation agreements exist between Australia and another country. There is a double taxation agreement between the UK and Australia.

Australia uses a self-assessment system which has to take into account Income Tax, Capital Gains Tax and the Medicare Levy. The onus is on the taxpayer to declare the correct income. An incorrect return may incur a severe penalty.