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

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, December 3, 2020

Recorded event now available

or call 1-800-926-7926
Course Materials

This course will provide tax advisers filing returns for clients taxed in both Australia and the U.S. with an explanation of reporting requirements and tax obligations in both countries. The panel will discuss treaty provisions, relief from dual taxation, residency determinations, and how to mitigate overall taxes paid.

Description

The U.S. estate tax exclusion for non-resident aliens is only $60,000 compared to the $11.58 million exemption ($23.16 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.

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Outline

  1. The U.S.-Australia Income Tax Treaty
  2. Residency determinations
    1. Australia
    2. United States
  3. Types of income and taxation
  4. Australian superannuation funds
  5. Totalization agreement
  6. The U.S.-Australia Estate tax treaty
  7. Dual taxation relief
  8. FATCA and FBAR reporting
  9. Other planning steps

Benefits

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 non-resident 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.

Faculty

Kennedy-C. Edward
C. Edward Kennedy, Jr., CPA, JD

Managing Director
C Edward Kennedy Jr

Mr. Kennedy has more than 36 years of experience dealing with a variety of international tax matters, specializing in...  |  Read More

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.

Partner
Culhane Meadows Haughian & Walsh

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

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