Sending money overseas to a client can be risky. It may expose a practitioner to a claim or even personal liability for money owed by the client to the Federal Government.
Sending money overseas to a client can be risky. It may expose a practitioner to a claim or even personal liability for money owed by the client to the Federal Government.
In one claim the practitioner was instructed by their Asian-based client to transfer settlement funds from the sale of real estate to a bank account in Singapore. The proceeds were sent in Singapore dollars. The client claimed the funds should have been sent in Australian dollars and as a result alleged they suffered a loss of over $10,000. Ensure you seek instructions, preferably in writing, as to the required currency and any other details.
LPLC is also aware of circumstances where a bank sent funds in the wrong currency with the bank then blaming the practitioner for the error. To avoid this, we recommend the practitioner provides written instructions to the bank specifying the relevant currency for the international funds transfer.
Sending funds overseas may need to be reported to AUSTRAC, for example mailing $10,000 or more in Australian dollars must be reported.
Practitioners also need to consider whether section 255 of the Income Tax Assessment Act 1936 (Cwlth) applies to the transaction. Section 255 provides that ‘any person in receipt, control or disposal of money from a non resident is personally liable for the tax payable by the non-resident to the extent of any amount that the person has retained, or should have retained’.
