CGT Event I1: Australia's Deemed Disposal on Departure
CGT Event I1 is triggered when a person ceases to be an Australian tax resident. All 'taxable Australian property' exclusions operate in reverse — I1 deems you to have disposed of all assets EXCEPT 'taxable Australian property' (primarily Australian real estate and direct business assets). Assets subject to CGT Event I1 (deemed disposed at FMV on departure): (1) Non-Australian shares, ETFs, and managed funds (including foreign equities in Australian brokerage accounts); (2) Foreign real estate and foreign business assets; (3) Intellectual property not connected to Australian business; (4) Cryptocurrency (if the ATO treats it as a CGT asset); (5) Some collectibles. Assets NOT subject to I1 (remain in Australian CGT net): (1) Australian real estate (taxed when actually sold); (2) Shares in Australian companies with 10%+ ownership where company has >50% assets in Australian property; (3) Direct interests in Australian business assets. CGT discount: the standard 50% CGT discount for assets held >12 months still applies to I1 gains. Tax rate: I1 gain is included in your assessable income for the year of departure; taxed at your marginal rate (up to 47% including Medicare levy) with the 50% discount if eligible. Option to defer: you can elect to NOT apply I1 and instead have the assets remain in the Australian CGT net (they will be taxed when eventually sold, even as a non-resident). This deferral is useful if you expect Australian CGT rates to be lower than rates in your destination country.
ATO Residency Tests: When Do You Cease Australian Tax Residency?
The ATO applies four tests to determine Australian tax residency. You are an Australian resident if you satisfy ANY of the tests: (1) Resides test: you 'reside' in Australia — the broadest test based on facts and circumstances, including physical presence, domicile, family, business, social ties. (2) Domicile test: your domicile is in Australia UNLESS your permanent place of abode is outside Australia. Domicile is a legal concept — harder to change than simple residency. (3) 183-day test: you are physically present in Australia for more than half the income year (183 days). (4) Superannuation test: relevant mainly for Commonwealth government employees (excludes most individuals). Ceasing Australian residency: typically requires a combination of departing Australia, establishing a permanent home overseas, and severing sufficient Australian ties (family, employment, memberships). The ATO can and does challenge residency cessation for individuals who maintain strong Australian ties (Australian property, Australian spouse, Australian business) — particularly under the domicile test. The ATO's 'domicile' test is Australian-specific legal concept — your 'domicile of origin' as an Australian-born person is Australia, and it is difficult to change. For most practical purposes: if you have moved overseas permanently, sold your Australian home, your family is with you, and you do not return to Australia regularly, the ATO will generally accept non-residency.
Australian Superannuation on Departure
Superannuation is Australia's mandatory employer-contribution pension system. CGT Event I1 does NOT apply to superannuation — it is specifically excluded. Your superannuation remains in your Australian super fund. Access: you cannot access superannuation until preservation age (60 for those born after June 30, 1964). You cannot access super merely because you have left Australia. As a non-resident: your superannuation remains invested and continues to grow (earnings in the accumulation phase are taxed at 15% within the fund — this continues). Contributions: employer contributions end when Australian employment ends. Personal voluntary contributions to Australian super as a non-resident are generally not possible (no Australian tax deduction; no employer relationship). DASP (Departing Australia Superannuation Payment): if you are or were a temporary visa holder (working holiday, student, 457/482 visa) who has permanently left Australia, you can apply for DASP to access your super early. DASP withholding tax: 65% for working holiday maker visa holders; 35% for other temporary residents. DASP is available via the ATO's online DASP application system. Australian permanent residents and citizens: cannot access DASP — must wait until preservation age regardless of departure. New Zealand citizens under the Trans-Tasman Portability agreement: can transfer AUS super to an approved NZ KiwiSaver scheme.
Main Residence Exemption: The 2019–2020 Non-Resident Rule Change
Australia's main residence exemption (MRE) historically exempted capital gains on your principal home. For non-residents, a significant rule change applies: from July 1, 2020 (with the change enacted May 2017, transitional rule for contracts entered before May 9, 2017). Non-residents (including former residents who are now non-residents at the time of sale) can no longer claim the full main residence exemption on the sale of their Australian home. Pre-existing main residence exception: if you owned the property before May 9, 2017 AND signed a contract to sell before June 30, 2020, the old MRE rules applied (transitional period now expired). Current rules from July 1, 2020: a non-resident selling an Australian property that was their former main residence must pay full CGT — no MRE. The gain is calculated using the general CGT rules (cost base from original purchase). The 50% CGT discount is NOT available to non-residents (removed from 2012 for non-residents, except through a special rule for the period of actual Australian residency). This change was extremely significant — former Australian homeowners living abroad who held onto their property and sold after July 1, 2020 faced unexpected large CGT bills. Planning implication: if you have a former Australian home, selling BEFORE leaving Australia (while still a tax resident) enables you to claim the MRE in full. Selling after departure triggers full CGT as a non-resident.
Medicare Levy, Final Return, and Post-Departure Australian Tax
Medicare levy (2% of taxable income) applies for the Australian resident period in the year of departure — you pay it for the months of Australian tax residency. After departure: Medicare levy does not apply to non-residents. Medicare Levy Surcharge: only applies to Australian residents — ceases on departure. Australian income tax return for departure year: covers July 1 to your departure date (or residency cessation date, if different). In Australia, the income tax year runs July 1 to June 30 — your final return covers the portion of that year before departure. File a standard individual tax return (myTax or paper) including CGT Event I1 gains in Schedule 3 (Capital Gains). Deadline: October 31 for individual returns (or February 28 if you use a tax agent). As a non-resident after departure: ongoing Australian tax obligations arise if you have Australian-source income: rental income from Australian property; dividends from Australian companies (typically 30% dividend withholding tax, reduced under DTA); Australian sourced business income. Non-resident tax rates: non-residents pay Australian income tax on Australian-source income starting from 30% (no tax-free threshold applies to non-residents).