morsie

hi have just joined the forum and am hoping to get some tips about my uk pension which is due tom be paid in sept this year. I got my uk super last year and am having to pay 37% tax on it. Just wondering if anyone has any advice on how to minimise the tax payable on my aged pension? Appreciate any help thanks

renth

I think you just have to declare it as income on your tax return.

Wol

Welcome.

If I understand you correctly, you are in Australia, paying tax, and receiving a UK state pension?

In this case, you declare the UK pension in dollars. When I started I phoned the ATO to see if I could claim for the exchange commission losses and the officer said that as a matter of practicality if I just entered the amount each month that went into my Australian bank that would suffice.

You do get an allowance if appropriate called the ündeducted purchase price. This involves, for a non-state pension, getting from employers all your contribution figures and the ATO work out the allowance. For the state pension you can either do the same thing, or - much easier - just take it as 8% of your annual state pension.

Hope this helps?

Kiwipaul

If you are 65 years or over you have a tax free allowance of $32,279.

If you’re single, you can earn up to $32,279 in the 2014/2015 year (or for the 2013/2014 year, or for the 2012/2013 year) in non-super income without paying a cent of tax because of the application of SAPTO and LITO.

So if you are paying Oz tax at 37% your non super income must be greater than $94,079 (super income is tax free) and if you are married the tax free allowance is even greater.

spouse of scouse

But are superannuation payments from a UK super fund tax free in Australia? They're not the other way around, i.e. if you're living in the UK and receive an Oz super pension, you're taxed on every dollar (pound) above your personal tax-free threshold.

Grayling

No they are not tax free....they are considered part of your income and taxed accordingly.

Kiwipaul

+1

So the OP has a tax free threshold of $32,279 (assuming they are over 65) for non super income before they have to pay any tax and so the OP must be earning (work or investment income (UK Pension) outside of Super) over $94,079 to be in the 37% tax bracket plus whatever super he receives which would be tax free.
The Oz super system is incredibly generous and it cannot be long before that has to change.