Clients are overlooking the importance of disclosing foreign income or foreign asset holdings to their financial advisers, a tax partner with a major accounting firm said.
"If it hasn't really been part of the discussion or part of the investment strategy then it's easy to overlook," HLB Mann Judd Sydney tax partner Peter Bembrick told InvestorDaily.
"A lot of the time people don't even think about bringing up overseas investments as they don't think it's relevant."
Clients who hold foreign investments are usually those that have travelled or worked overseas, Bembrick said.
"We're definitely seeing that - where they've innocently forgotten about bank accounts or funds."
He said while the awareness of disclosure is increasing, there are still a number of cases coming through.
It's vital for advisers to highlight the importance of overseas investments, as the number has steadily increased over the years, Bembrick said.
"Be aware of what clients have and also pay special attention to those investments will ensure they're paying the right tax and also any credits that they might be missing out on," he said.
"Anything to do with overseas transactions or where there are holdings overseas, make sure that's all disclosed."
HLB Mann Judd Sydney has been receiving client letters sent by the Australian Taxation Office (ATO) where there has been a suspicion of assets or bank accounts held overseas but the income has not been declared on the tax return.
"The ATO is giving people the opportunity to come forward and disclose but if you're given the opportunity and you don't disclose, the penalties will be much [greater]," Bembrick said.
"The ATO are better able to source income overseas from authorities and get information from banks and institutions so they have a pretty good idea if somebody has holdings overseas and they look for that to be disclosed in the [tax] return."
