Boz6

I am both a UK and Australian citizen, I am 62 retired so do not pay tax in Australia. I am moving back to the UK, Does anyone know if the UK will tax my Australian super income?

ozzieeagle

If they do, try and get a free council dwelling out of erm...

Seriously though, wouldn't you be taxed on any income earned in interest above the minimum income tax threshold... whatever that is ? Which I would have thought would have been the same as the tax on interest from super here.

Interesting question actually... Or are you getting it as an Annuity ?

NickyC

My understanding is that they will tax it. It's just income to them. Same as UK pensions are taxed by Australia if you live in Australia (though admittedly you can get some tax deductions here for some foreign pensions).

You do get the UK personal allowance, of course, so won't tay tax on all of it.

NickyC

In Australia, the tax on superannuation earnings is only 15% and it's paid directly by the super fund. No tax is payable on income drawn from superannuation.

Normal rates of tax apply to interest on money held outside of superannuation, of course. If the OP has all his money in superannuation then he legitimately pays no income tax at all.

ozzieeagle

I didn't realise that......But it affects your Government pension in Australia and not the UK pension, as the UK one isn't means tested, correct ?

Hang on ... Just one cotton picking minute !! How do they know any money you have after your retirement, if taken as a lump sum is from super ? How do they differentiate your own cash from super cash ?

NickyC

Yes. Dead right. UK pensions are not means tested, Australian pensions are.

We would never get an Australian pension (too many assets), but my OH gets a small UK one.

NickyC

You can take a lump sum from your super fund and no tax is payable when you withdraw it.

But as soon as you put that lump sum into a normal bank account (or invest it somewhere else) and it earns interest then that interest becomes taxable - because the superannuation rules no longer apply once the money is removed from the superannuation fund.

If you want to live off your money tax-free then you have to leave it in super and withdraw it from there.

ozzieeagle

Ahh ok now I've got you.... Although I think we can only keep our super in our fund at the Post office until 70 years of age...I'd best check that one out.... Unless they mean you can't contribute to it after that age

The post office pays its employees 15pct rather than 9.5 pct super.

Ta Nicky

NickyC

There are two phases (or types of account) within superannuation - the accumulation phase is when money is going into super before you retire. That's the one that probably has the age limit of 70 on it and the one you're currently in.

Once you retire, your super moves into the pension phase. It's a different type of super account and the one you can withdraw money from. That account should be available to you until you die (assuming there's money still in it ).

Boz6

I am taking it as an income stream.