Bringing money to Australia: what's taxable and what isn't

The core principle: capital versus income

The Australian tax system taxes income, not wealth. When you transfer savings from your home country to an Australian bank account, you are moving capital — money you already own. This movement of capital is not a taxable event. It does not matter how much you transfer, whether you bring it in a single lump sum or in stages, or whether the money arrives before or after you do.

What the ATO does tax is the income that capital generates after you become an Australian tax resident. If your transferred savings sit in an Australian bank earning interest, that interest is assessable income. If you keep money in an overseas bank account earning interest, that interest is also assessable (unless you qualify for the temporary resident exemption). The principal remains untaxed — only the returns on it are.

This principle applies regardless of the source of the original capital. Employment savings, inheritance, proceeds from selling property before arrival, gifts from family members, and the value of any other assets you bring are all treated the same way. The ATO does not tax any of them at the point of transfer or arrival.

Property sold before arrival

If you sell property overseas before becoming an Australian tax resident, the proceeds are pre-arrival capital. No Australian capital gains tax (CGT) applies because the disposal occurred before your residency start date. You can transfer the full sale proceeds to Australia without any CGT obligation.

Keep documentation of the sale — the contract, the settlement statement, and evidence of the sale date relative to your arrival date. If the ATO queries a large deposit in your Australian bank account, this documentation establishes that the funds represent a pre-arrival capital transaction.

Property sold after becoming a resident

If you sell property overseas after becoming an Australian tax resident, CGT may apply. However, the ATO provides an important concession: the cost base of the property for Australian CGT purposes is reset to its market value on the date you became an Australian tax resident (ATO). This means you are only taxed on the gain (if any) between your residency start date and the date of sale — not on any appreciation that occurred before you arrived.

For example, if you bought a property in the UK for GBP 200,000, it was worth GBP 350,000 on the date you became an Australian tax resident, and you sold it for GBP 400,000 two years later, the assessable capital gain for Australian purposes is based on the difference between GBP 350,000 (the market value at residency date) and GBP 400,000 (the sale price) — not the original GBP 200,000 purchase price.

If the property was your main residence overseas and you continue to treat it as such under the CGT main residence exemption rules, there may be further concessions available. The interaction between Australian CGT rules and overseas property ownership is complex, and a registered tax agent should be consulted before selling.

Temporary residents are generally exempt from CGT on foreign assets, including overseas property. If you hold a temporary visa and sell property overseas during that period, no Australian CGT applies.

Overseas bank accounts and interest

Interest earned on overseas bank accounts is assessable income from the date you become an Australian tax resident (for permanent residents) or exempt (for temporary residents under the foreign income exemption).

Many new migrants keep bank accounts in their home country, either because they have not yet transferred all their funds, or because they maintain accounts for ongoing obligations (family support, loan repayments, property maintenance). If you are a permanent resident, the interest those accounts earn must be declared on your Australian tax return.

The amounts may be small — a savings account earning 2% on a AUD 20,000 equivalent balance generates AUD 400 in interest per year. But the obligation to declare exists regardless of the amount, and the ATO receives information about overseas accounts from many countries through the Common Reporting Standard (CRS). Under-reporting overseas interest is increasingly likely to be detected.

If foreign tax is deducted from the interest by the overseas bank (withholding tax), you may be able to claim a foreign income tax offset (FITO) on your Australian tax return to avoid double taxation.

Shares and investments

The same capital-versus-income distinction applies to shares and other investments.

Shares you owned before becoming an Australian tax resident have their cost base reset to market value on your residency start date. If you sell them after becoming a resident, you pay CGT only on the gain since residency. Dividends received after your residency start date are assessable income (with FITOs available for foreign withholding tax). Temporary residents are exempt from CGT on foreign shares and from tax on foreign dividends.

If you hold shares in an overseas company that pays dividends, and Australia has a DTA with the country where the company is based, the DTA may limit the withholding tax the foreign country applies, and Australia will generally provide a FITO for the tax withheld.

Gifts and inheritances

Money received as a gift or inheritance is generally not taxable in Australia — the ATO does not have a gift tax or an inheritance tax. This applies whether the gift or inheritance is received before or after you become a tax resident.

However, if you inherit an income-producing asset (such as a rental property or share portfolio), the income that asset generates after your residency start date is assessable. And if you later sell an inherited asset, CGT may apply on any gain above the cost base (which may be the market value at the date of death, depending on the circumstances).

For large gifts received after arriving in Australia, keeping a record of the gift (a letter from the giver, bank transfer records, any formal gift documentation) is advisable. The ATO may query unexplained large deposits, and being able to demonstrate that a deposit is a non-taxable gift rather than undeclared income avoids complications.

The practical record-keeping challenge

The most common tax issue for new migrants is not a conceptual misunderstanding — it is a record-keeping failure. When the ATO sees large amounts flowing into an Australian bank account, it may ask the taxpayer to explain the source. If you cannot demonstrate that the funds represent pre-arrival savings, a gift, or the proceeds of a pre-arrival asset sale, the ATO may treat the unexplained amount as assessable income.

Before you arrive, gather and keep documentation of the source of all funds you plan to transfer to Australia. This includes bank statements from your home country showing the account balance and history over the past 12 months or more, evidence of employment income (payslips, tax returns) that explains how the savings were accumulated, contracts and settlement statements for any property sold before arrival, gift deeds or statutory declarations for any gifts, and inheritance documentation (probate, executor's letters, estate distribution records).

Keep these documents for at least five years after the relevant tax year — the ATO's standard amendment period. Digital copies stored securely are sufficient; you do not need to keep the originals.

Transferring money in stages versus all at once

There is no tax difference between transferring your savings in one large lump sum or in multiple smaller transfers. The ATO does not tax the transfer itself — only the income it generates.

However, from a practical perspective, transferring in stages can help you manage exchange rate risk (locking in different rates at different times), avoid being affected by a single unfavourable rate on a large amount, and match your transfer timing to your spending needs in Australia.

From a tax perspective, the main consideration is that any exchange rate gain or loss on a foreign currency bank balance is generally not a taxable event for individuals holding personal-use amounts. However, for very large amounts held specifically for investment purposes, exchange rate gains may be assessable. If you are holding significant amounts in foreign currency for extended periods after becoming a resident, consult a tax agent.

AUSTRAC reporting is not tax reporting

New migrants sometimes confuse AUSTRAC reporting with tax reporting. They are separate systems. AUSTRAC monitors money movements for anti-money-laundering purposes — it does not determine your tax obligations. Your bank automatically reports international transfers (of any size) and cash transactions of AUD 10,000 or more to AUSTRAC. These reports do not generate a tax liability.

However, the ATO does have access to AUSTRAC data and may use it as part of compliance activities. If AUSTRAC data shows large international transfers and your tax return shows minimal income, the ATO may request an explanation. This is another reason why keeping clear records of the source and purpose of transferred funds is important.

Will I be taxed when I transfer my savings to Australia?

No. Transferring pre-arrival savings to an Australian bank account is a movement of capital, not income. No tax applies to the transfer itself.

Do I need to report the transfer to the ATO?

Not separately. The transfer is not a taxable event, so there is no specific reporting requirement. However, any income the funds generate (interest, dividends) after your residency start date must be declared on your tax return.

What about cryptocurrency I bring to Australia?

Cryptocurrency is treated as a CGT asset by the ATO. If you held cryptocurrency before becoming an Australian tax resident, the cost base is reset to market value on your residency start date. If you sell or exchange it after becoming a resident, any gain above the residency-date value is assessable. Temporary residents are generally exempt from CGT on foreign assets, which may include overseas-held cryptocurrency.

Should I sell overseas assets before or after arriving?

This depends on your specific circumstances, including the potential capital gain, any applicable DTA, whether you qualify for the temporary resident exemption, and the tax treatment in your home country. In general, selling before arrival avoids Australian CGT on the gain, but may crystallise a tax liability in your home country. Selling after arrival may benefit from the cost base reset but creates an Australian CGT obligation. Consult a registered tax agent before making this decision.

Is there a limit on how much money I can transfer to Australia?

There is no limit on the amount you can transfer electronically. All international transfers are automatically reported to AUSTRAC by your bank, regardless of amount. There are no tax implications for the transfer itself.