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Migrants Urged To Obtain Advice About Tax Concessions

Expatriates who receive generous tax concessions for living and accommodation costs are encouraged to obtain professional advice about the impact of changes to the Living Away From Home Allowance (LAFHA).

Proposed budgetary changes, due to come into effect on July 1, 2012, will make it tougher for temporary residents on 457 visas to receive the tax-free benefits they currently obtain under the LAFHA.

At present many workers, who come to Australia on 457 visas, are eligible to receive tax concessions – which in some cases can amount to as much as $4,000 per month – under the LAFHA.

The allowance has provided a boost for business owners to attract workers and provide the concessions without the burden of fringe benefits tax (FBT).
Mr Murray McKinley, a prominent accountant who has been advising migrants for over a decade, said from July 1, the LAFHA could only be claimed by people who maintained a home in Australia that was away from their place of work.

Mr McKinley, a director of McKinley Plowman & Associates, said for example if an employee came to Perth and set up and maintained a home there, but then had to work in Kalgoorlie, he or she would be eligible for the allowance.

He said this was markedly different from the current system which enabled a lot of 457 visa holders to claim the allowance on the basis they usually lived overseas and were working in Australia on a temporary basis.

“There is a lot of confusion around about how the changes, which have been introduced as part of the Mid-Year Economic and Fiscal Outlook 2011-12 (MYEFO), will affect one’s entitlements,” Mr McKinley said.

“The best course of action for anyone, particularly those who intend to apply for permanent residency, is to obtain professional advice relating to their circumstances.”

Mr McKinley said permanent residents who were currently eligible for the LAFHA would not be affected by the changes.

However, it was advisable for migrants to find out how tax planning could be used to ensure one didn’t receive any “nasty surprises”.

“There are plenty of opportunities to legally minimise tax through salary sacrificing into superannuation or negatively gearing into investments, Mr McKinley said.

“But the best way to take advantage of these is to plan ahead and obtain advice regarding one’s individual situation.”

Throughout 2012 Mr McKinley will co-host information seminars for migrants with migration agent and lawyer Mervyn Rothstein, of M Rothstein & Co Migration Agents and Lawyers.

The seminars will provide insight into a broad range of taxation and legal issues affecting migrants.

For more information or to register for the free seminars contact McKinley Plowman on 93012200.

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