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Old Nov 15th 2013, 5:12 am   #1
Hino
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Default UK Pension problem.

Earlier this year I was granted a UK aged pension. Of course Centrelink immediately deducted most of it from what Australian pension I receive. But along with the notice that I was being granted the UK pension, was advice that I would also receive almost GBP 3000 in back payments, centrelink seem to have ignored this payment even though they must be aware of it.

Today I received another letter from UK informing me that as I had delayed claiming my pension, I could either have an increased pension or a lump sum of over GBP 8,000.

The pension form asking me to chose either the increase or the lump sum then goes into UK tax matters and asks me confirm the highest rate of UK tax I would be liable for in the relevant tax year.

As I'm no longer a UK resident and UK personal allowance in my case is over GBP 10,000, I "assume" that I do not have a UK tax liability and can tick the 0% box on the UK tax inquiry.

But what is my situation with regards the ATO ? Is all my UK pension and the lump sums liable to Australian tax ?

I should be happy about getting a $15 K 'drink', but I'm starting to wish I'd never applied for it. I've quite enjoyed telling the ATO that I'm not liable for tax so please give me my franking credits. Now it looks like I'm going to be filling in ruddy forms again.
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Old Nov 15th 2013, 9:59 am   #2
BASHO
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Default Re: UK Pension problem.

Have it payed into , http://en.wikipedia.org/wiki/List_of_banks_in_Jersey , take your pick , stay schtum , don't post what you've done anywhere.
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Old Nov 15th 2013, 11:51 am   #3
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Default Re: UK Pension problem.

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Originally Posted by BASHO View Post
Have it payed into , http://en.wikipedia.org/wiki/List_of_banks_in_Jersey , take your pick , stay schtum , don't post what you've done anywhere.
Hi Hino, I'm pretty sure that you'd only be taxed in Australia on the interest earned from the lump sum (assuming you invested/saved it) - very much doubt that you'd have to pay tax on the actual lump sum.

I don't think that Centrelink need to be involved at all unless you received a lump sum (from any source) that caused you exceed your assets ceiling, or that generated an amount that caused you to exceed your income ceiling.

Just my thoughts though, do you know a tax accountant you can check with?
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Old Nov 16th 2013, 1:52 am   #4
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Default Re: UK Pension problem.

Quote:
Originally Posted by BASHO View Post
Have it payed into , http://en.wikipedia.org/wiki/List_of_banks_in_Jersey , take your pick , stay schtum , don't post what you've done anywhere.
I did that for quite a few years when I was working offshore and employed by the yanks. It worked real well for a time, but I could move a lot faster then....if you get my drift
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Old Nov 16th 2013, 2:02 am   #5
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Default Re: UK Pension problem.

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Originally Posted by spouse of scouse View Post
Hi Hino, I'm pretty sure that you'd only be taxed in Australia on the interest earned from the lump sum (assuming you invested/saved it) - very much doubt that you'd have to pay tax on the actual lump sum.

I don't think that Centrelink need to be involved at all unless you received a lump sum (from any source) that caused you exceed your assets ceiling, or that generated an amount that caused you to exceed your income ceiling.

Just my thoughts though, do you know a tax accountant you can check with?
Thanks SOS,

I was worried that I would have to get into a five cornered fight with Centrelink, ATO, UK DWP, UK Tax man and myself. But the more I think about it the less I am worried about Centrelink and UK DWP. They data share, so I don't need to communicate with either of them, that just leaves the two tax agencies to take care of.

I'm pretty sure that I'll be clear of UK taxes, so I'll take your advice and see my accountant about my Oz situation. I just needed time to think about it...and a little help
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Old Feb 24th 2014, 10:34 am   #6
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Default Re: UK Pension problem.

Your should speak with your tax agent on this one and may need to get a private ruling from them to clear up your personal situation.

On normal lump sums payments where you also take a ongoing pension payment the ATO looks at tax on the lump sum component only. To work it out is a bit complex but in essence they want to know what earnings you achieved on your entire fund and then proportion that against the lump sum component prorata.

ie if the lump sum was 10 % of the fund then you declare 10 % of the entire earns on the pension fund.

The period of earnings is for the time that you were in Australia only.

Speak with your accountant and if unclear ask for a private ruling from the ATO on it.


I hope that helps

cheers JOHN
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