Foreign Income Tax Return:

As an Australian resident for tax purpose, all individuals are required to report all income that they earn worldwide in their Australian tax return – both assessable income and exempt income. Regardless of whether tax was taken out in the overseas country where they had originally earned the income.

Income earned by individuals who are Australian residents for tax purpose will need to report all foreign income, which can be derived from pensions and annuities, employment income, investment income, business income, gains on overseas assets. Individuals may also be subject to double taxation, if they are also paying tax in the source country which can be then used as an offset.

If you are not an Australian residents for tax purpose, then you are not required to report your foreign income in your Australian tax return.
Some income may be tax exempted on your foreign income if you are a member of an Australian defence or police force and organisations engaged in overseas aid work.

Foreign Property tax return:

Individuals who are Australian residents for tax purpose must report their foreign rental property in their Australian income tax.
Foreign rental property income includes the integrated amount of rent and other associate incomes from the rented property received directly or through the agent. If the tax payer has paid tax in the overseas countries then a foreign income tax offset can be claimed when lodging the Australian tax return.

If the tax payer rents out part of their home it is subjected to tax, Capital Gains Tax (CGT) and Goods and Services Tax (GST). When selling an overseas property, tax payers must post the capital gains/loss on their Australian tax return. If the gain is taxable in Australia and they paid foreign tax on it, they may be entitled to a foreign income tax offset.

Capital loss cannot be claimed against income, it will be carried forward to future years and used to reduce capital gains derived in that particular year. If capital losses exceed capital gains in an income year, the loss can be carried forward and deducted against capital gains in future years.

For more information you can click on the following links:
Australian Taxation Office 2015 Rental income from overseas property, available from:
Australian Taxation Office 2015 Foreign Income, Available from:

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