Hi,

My wife and I will be relocated in Q1/06 from the UK to Sydney for 4 years on working Visas.

One of our friends in Sydney informs us that we will be able to deduct 1/2 our living expenses whilst there, as we are not permanent residents coming there to settle.

Questions:

1) I would guess that if this rebate is true, then we get it back at the end of the year on our tax form. True?

2) I see the NII insurance form in our package mentions a rebate when we leave Oz and go back to our homeland. True?

Any other interesting tax advantages we should be aware of? We're shipping a 40ft container with only essential furnishings, etc and our Caterham sports car (which we have owned for 3.5 years) with us.

Thanks for any help you can offer us!

What your friedn has told you about is Living Away from Home Allowance (LAFHA).

Ask your new sponsors/employers about it ??

When we claimed it my sponsors sorted it all out for me. Basically you are entitled to claim the cost of your rent (providing it is reasonable - I guess there is a limit but am not sure what that is) and an amount for food etc - this varies dependent on how many are in the family. This total amount is considered a tax free income. What my sponsors did was take my gross income, deduct the LAFHA amount from it, calculate the tax witheld on this lower amount and then add back on the LAFHA amountand then pay me !!

$1500 per week gross income
-$600 per week LAFHA
---------------------------
$900 adjusted income
-$200 tax etc
---------------------------
$700 net
+$600 LAHFA
---------------------------
$1300 weekly take home

At the end of the year the tax return only reflected the 'adjusted income' amount for each week of the year.

There maybe other ways of doing it if your employer wont do it for you - consult a tax accountant when you get here. Also search for "LAFHA" on the net - I am sure there will be plenty of info - may even on here !! Or ask Alan Collett !!

By 'NII insurance form' do you mean superanuation ?? There is no National Insurance as such in Oz - but your employers must pay superanuation (or pension) contributions of 9% of your income into a scheme here. I believe that you can get this back when you leave but I think there is a small 'admin' charge !! Again look on the net - I remember reading this when we moved here on a 457 visa 3 years ago - but we are staying for good now so am more concerned about moving my UK pension funds to here or leaving it there !!!

Another thing on LAFHA - should u decide to stay permanently u must stop claiming LAFHA once u lodge your intention to stay with DIMIA.

The Living Away From Home Allowance is not a deduction you can claim personally. Rather it is a salary packaging exercise to be agreed with your intended employer before you start working on the 457 visa.

See also:
http://www.gomatilda.com/news/article.cfm?articleid=61

Best regards.

cheers, that makes things quite clear. As my offer is being sorted this week I really appreciate the information so I can ask them to address it in my salary!

Cheers,