Readers’ forum: Australian income

We are talking to a new client who was born in Australia although we believe that her father would have been UK domiciled as at the date of her birth.

She is intending to come to the UK for five years and we have been asked to comment on her UK tax position. We have taken the approach that she will not benefit from the non-dom rules so we are looking at the impact on her worldwide income.

She will be receiving loans from an Australian company and we have been advised by our Australian counterpart that those loans are taxed under Div 7A in Australia which means that the company votes a dividend to cover a proportion of the outstanding loan which then reduces the loan balance.

This dividend is taxed as income in Australia.

Having done a little reading around Div 7A it seems that the...