U.S.-Australian Dual Taxation Issues: Superannuation Funds and the U.S.-Australia Income and Estate Tax Treaties

The U.S. estate tax exclusion for nonresident aliens is only $60,000 compared to the $13.99 million exemption ($27.98 for married taxpayers) for U.S. residents. Australia is one of only 18 countries that has an estate tax treaty or agreement with the U.S. The U.S.-Australia estate treaty stipulates the taxation of assets in each country based on location and extends the U.S. estate tax exclusion to certain Australian residents as well.

Unique to Australia is its superannuation funds (supers). The tax treatment of these funds is perplexing. They are similar to U.S. Social Security income and retirement income but do not fit neatly into either category. Opinions vary on the U.S. tax treatment of supers. Practitioners struggle with the income taxation of supers, not wanting to subject clients to unnecessary taxation but wanting to steer clear of preparer penalties. Supers are subject to both FBAR and FATCA reporting requirements in the U.S.

Taxpayers with a presence in Australia and the U.S. must consider the residency rules in both countries, the taxation of real property and investments in each, and the availability of treaty relief from dual taxation. A thorough analysis of the U.S.-Australian Income and Estate Tax Treaties is necessary to understand what is subject to tax in each country.

Listen as our panel of experts provides a comprehensive review of the tax issues confronting U.S.–Australian taxpayers, and how to circumvent or lower taxation in both countries.

I. The U.S.-Australia Income Tax Treaty

II. Residency determinations

A. Australia

B. United States

III. Types of income and taxation

IV. Australian superannuation funds

V. Totalization agreement

VI. The U.S.-Australia Estate Tax Treaty

VII. Dual taxation relief

VIII. FATCA and FBAR reporting

IX. Other planning steps

The panel will review these and other vital issues:

• Identify key provisions in the U.S.-Australian Income and Estate Tax Treaties
• Determine when a nonresident might have a taxable presence in Australia or the U.S.
• Recognize situations in which totalization agreements apply
• Ascertain options available to employers and employees to obtain the most favorable Social Security tax treatment
• Establish how a taxpayer can avoid dual tax liabilities
• Identify the tax reporting requirements of U.S. resident taxpayers and foreign individuals

Learning Objectives

After completing this course, you will be able to:

• Determine treaty benefits available for relief from dual taxation
• Decide when an individual may meet the residency requirements in Australia
• Ascertain when additional U.S. foreign reporting obligations may exist for Australian accounts
• Identify various tax treatments of Australian supers

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

  
  

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IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).