Tax Advice

Foreign Investment Fund (FIF) Rules

One particular tax issue that regularly causes concern and some confusion for many expatriates returning to Australia is the application of the foreign investment fund (FIF) rules. These rules were introduced by the Government as a means of stopping individuals from deferring the payment of Australian tax on foreign investments.

The rules are stringent and may require you to bring to account the increase in the market value of your foreign held assets from year to year. You will be taxable on the increase in the value of the assets which means you could be paying Australian tax on unrealised foreign capital gains.

A number of exceptions do apply for shares held in listed foreign companies. However, not every listed foreign company is eligible for exemption. You should check with an Australian tax advisor, preferably prior to any return, as to whether investments you hold will be subject to the FIF rules.

Please note that the FIF rules do not apply to foreign real estate investments or foreign bank accounts or foreign employer superannuation funds.

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