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TAX GUIDE · MOVING ABROAD

Moving from Australia Tax Guide 2026: CGT Event I1 Deemed Disposal, Super & ATO Residency Tests

Daniel · CountryTaxCalc Updated May 2026
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KEY INSIGHT
Australia is one of the few countries alongside Canada with a broad exit tax equivalent — CGT Event I1 deems all your non-taxable Australian assets (investments, overseas property, foreign shares) to be disposed of at fair market value when you cease to be an Australian tax resident. Australian real estate is exempt from I1 (it stays in the Australian CGT net even as a non-resident). Superannuation is NOT deemed disposed of on departure but cannot be accessed until preservation age (60) regardless of where you live. The main residence exemption for non-residents was dramatically curtailed from July 1, 2020.
At a glance

Key Facts

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 32.5% (no tax-free threshold applies to non-residents).
Introduction

Australia operates one of the most comprehensive departure tax systems outside of Canada — CGT Event I1 (deemed disposal) applies to essentially all assets except Australian real property when you cease Australian tax residency. For long-term Australian residents departing with significant investment portfolios, superannuation balances, and overseas property, the CGT Event I1 assessment can be the largest single tax event of the departure year. Combined with Australia's complex residency tests, the post-2019 changes to the main residence exemption for non-residents, and the unique superannuation rules, Australian departures require careful planning typically 12–24 months in advance.

Section 01

Moving from Australia to the USA: Key Planning Points

Australia-to-USA migration is common for tech workers, academics, and dual citizens. Key AU-US cross-border planning points:

CGT Event I1 and US first-year residency: The CGT Event I1 is calculated when you cease Australian residency. If you depart Australia in, say, February and become a US resident in April of the same year, the I1 event occurred before US residency commenced — the deemed Australian capital gain is NOT US-taxable. Ensure your US tax advisor understands this. If you depart Australia and immediately become US-resident (same day), the overlap requires careful analysis.

Superannuation US tax treatment: Australian superannuation is NOT covered by the Australia-USA Double Taxation Agreement as a 'pension' in the traditional sense. The IRS has not provided clear guidance on whether super is a 'foreign grantor trust' or a 'foreign pension' — this is a contested area of US tax law. Most practitioners treat super as a foreign non-grantor trust or apply treaty positions. Withdrawals from Australian super while US-resident are generally US-taxable. Consult a cross-border specialist with specific AU-US super experience before or immediately after departure.

FBAR for Australian super: Once you are a US resident with an Australian super fund, the fund account value must be reported on FinCEN Form 114 (FBAR) if the aggregate balance of all foreign accounts exceeds $10,000. Some practitioners argue employer super funds are exempt — this is uncertain. Report to be safe.

Australian franking credits: Dividends from Australian companies carry franking credits (imputation credits). As a US resident, you generally cannot use the Australian franking credits against Australian tax (non-residents cannot claim a refund of franking credits). The ATO withholds dividend tax at source; you claim the net dividend as US income and take a Foreign Tax Credit for the Australian withholding.

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FAQ

Frequently Asked Questions

Do I have to pay CGT on all my shares and ETFs when I leave Australia?

Yes — CGT Event I1 deems your non-Australian investment portfolio to be disposed of at FMV on your departure date. This includes international ETFs, US shares, foreign property, and cryptocurrency held as CGT assets. Australian shares in companies that are not 'taxable Australian property' (i.e., most ordinary listed ASX shares) are ALSO subject to I1 — though the practical impact is that they stay in the ATO's CGT net via a different mechanism, and most Australians hold their ASX shares via their super fund (not directly). If you have large unrealised gains in your portfolio, you have options: (1) sell before departure (if a CGT sale while Australian-resident, you get the 50% discount and the current lower Australian rates); (2) take the I1 gain and pay Australian CGT now; (3) elect to defer I1 (the assets remain in Australia's CGT net until actually sold). The deferral is most attractive if your destination country's CGT rates are higher than Australia's (i.e., the USA's combined federal + state rates).

I left Australia 3 years ago and still own my former home — what are the CGT implications if I sell now?

This is one of the most consequential rule changes in recent Australian tax history. If you left Australia after May 9, 2017 and have not yet sold your former main residence: as a non-resident, you cannot claim the main residence exemption on sale. The full capital gain (FMV on sale minus original cost base) is taxable in Australia at non-resident rates (32.5–45%), with NO 50% CGT discount (the discount was removed for non-residents in 2012, with only proportional entitlement for the period of Australian residency retained). Practical example: if you bought the house for $500k, it is now worth $1.2m, and you sell as a non-resident, your gain is $700k — taxable at non-resident Australian rates with partial discount only for the actual Australian residency period. The ATO will withhold 12.5% of the gross sale price at settlement via FRCGW (Foreign Resident Capital Gains Withholding). To avoid the 12.5% withholding, obtain an ATO clearance certificate before settlement. This change affects many Australians abroad — the only way to avoid it entirely was to sell before leaving Australia.

I was on a 457 visa in Australia — can I claim DASP to get my superannuation back?

Yes — as a former 457/482 (now subclass 482) visa holder who has permanently left Australia, you are eligible for the Departing Australia Superannuation Payment (DASP). You apply via the ATO's online DASP portal at ato.gov.au. Requirements: your visa must have expired or been cancelled, and you must have permanently departed Australia. Withholding tax on DASP: for standard temporary visa holders (457/482, student visa, etc.): 35% tax is withheld at source on the taxable component of your super. For Working Holiday Maker visa holders (subclass 417 or 462): 65% is withheld — a punishingly high rate. The 65% WHM rate has been challenged legally but was upheld by Australian courts. After tax, the net amount is paid to your Australian bank account or a nominated overseas account. Processing time: typically 3–6 months from application. You do NOT need a tax file number to claim DASP as a non-resident. The DASP is a one-time withdrawal — it effectively terminates your superannuation interest.

Do I owe any Australian tax on my overseas income during the year I leave?

Yes — for the portion of the Australian tax year when you are still an Australian tax resident (July 1 to your departure date), you are taxed on your worldwide income, including overseas employment income, foreign dividends, and foreign rental income. This is the same as any Australian resident — you report all worldwide income in your final Australian tax return. After your departure date: you only pay Australian tax on Australian-source income (Australian rental, dividends, business income). Foreign income received after ceasing Australian residency is NOT taxable in Australia. The transition date is critical — if you are unsure of your exact Australian residency cessation date (ATO residency tests are fact-specific), obtain an ATO private ruling before filing your final return. Medicare levy applies for the resident period only.

What happens to my Australian bank accounts and shares when I move abroad?

Australian bank accounts: you can maintain them as a non-resident. Notify your bank of your non-resident status — your bank must apply non-resident withholding tax to interest (typically 10% WHM, reduced by DTA). Under FATCA, if you become a US resident, your Australian bank accounts must be reported to the IRS by the bank. ASX shares: you can continue to hold Australian shares as a non-resident. When dividends are paid, Australian withholding tax (typically 30%, reduced to 15% under USA-Australia DTA) is applied. When you eventually sell ASX shares as a non-resident: CGT applies to the Australian-source gain (Australian shares are 'taxable Australian property' if you hold ≥10% of a company with >50% property assets — otherwise a different analysis applies to ordinary ASX portfolio shares post-I1 election). CHESS-sponsored shareholdings: your HIN (Holder Identification Number) and share registry details remain valid as a non-resident. Inform your broker and share registry of your new overseas address and tax residency.
Disclaimer:This guide provides general tax information for educational purposes only. ATO residency rules, CGT Event I1, the main residence exemption changes, DASP withholding rates, and superannuation rules are complex and may change with Australian Federal Budgets. Nothing in this guide constitutes tax or legal advice. Consult a registered tax agent (RTA) in Australia before departing, and a cross-border specialist if moving to the USA for superannuation US tax treatment.
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