KathDore

OK all you clever ones out there!!

Could someone tell me if you get taxed on servicemans pension??Was just speaking to Ma & Pa who are coming out on retirement visa and thought ooh eer do they or dont they??? I know that no tax is taken in other countries such as South Africa and Spain etc I presume they wont pay it out there either or on their UK old age pension.

Ta oh clever ones

Kath

debsy

Hiya Kath
Sorry mate dont know the answer but I thought I would bring it to the top as the aussies will be getting up soon

Have you tried this on the other forum?

andy thomas

i'm no expert, all income is deemed taxable in oz, however if someone is in receipt of a pension that is deemed non taxable in their country of origin so to speek, then once in oz you can seek or apply for a personal ruling, basically you present your argument to the tax office and they may decide that you should receive it in oz as you did at home. so there is a chance. all cases are individual so you must present it. just because someone else has had a ruling previously it doesn't mean persons in a similar situation will be treated the same.

hope this helps.

KathDore

Thanks Andy and Debs

Mmm good surname Andy same as my maiden name!!

Ill let my parents know

Kath

andy thomas

even more of a coincidence I married a Kath

KathDore

ooh eer and my first husband was called Andy too!!!!

Kath

Jack The Lad

Are you going to OZ or NZ?

If NZ then there service pensions are tax free so it would seem a little unfair to tax your folkes pensions

Do they have to declare their service pensions?

I checked it out at this end and was told that I could have my service pension paid into any account in any country. The tax was to do with the country of residence.

Like I said do they have to know? They could have it paid into an acccount here and pay/not pay UK tax %.

It would be worth having some financial advice in the country of residence.

ABCDiamond

Assume that "everything" will be taxed, unless you get official confirmation that it won't be !

Just because it is Tax Free in the UK, (like Premium Bonds winnings), doesn't mean it will be the same in OZ. (UK Premium Bond winnings, owned by an OZ resident, are taxed in OZ)

Heres a link for some Tax sites

ABCDiamond

From the ATO

quote:
Most foreign pensions and annuities are taxable in Australia, even if tax has been withheld from your payment by the country that paid you.

Examples of pensions and annuities that fall into this category are age and superannuation pensions paid from

the United Kingdom
Italy
Germany, and
The Netherlands.
Exempt foreign pensions or annuities
Some foreign pensions or annuities will be exempt income in Australia and will not need to be included on your tax return.

Foreign pensions or annuities that are exempt income in Australia include:
certain service-related UK pensions

I think direct contact with the ATO, may be needed to clarify this, unless someone who is already getting it, can confirm anything.

cookies

Gratuity is not taxed if you receive it within 6 months of arrival.

Monthly pension is liable to tax in Oz as it is worldwide income. If you pay UK tax on the pension this needs to be declared to the Oz taxman as well, so he will only take the marginal [if there is any] Oz tax liable. Under the Double Tax Agreement, you can only pay tax once.

I am not sure yet if you can get the pension gross and all tax to Aus - I have fired off this question to the Inland Revenue, but no answer yet.

Steve

KathDore

Thanks for getting back to me everyone!!!

Well that does seem to help - I just need to get down to reading up more about it...

I really appreciate all your quick responses thanks...

BTW its and RAF pension... Jack their off to Oz later this year (fingers crossed)


Kath

cookies

As an update.....I have just had a letter from the Inland Revenue - pensions can be paid Gross in the UK and all tax liabilities made to the ATO.

Steve

Alan Collett

Its not "can be" - its "must be" under the terms of the Tax Treaty between the UK and Australia.

Best regards.

Ozbound7

I thought you had to apply to IR for pensions to be paid gross. If not what is the mechanism for it to happen?

Alan Collett

You do. However, if you don't apply for a No Tax Coding you will find that you are paying tax in the UK and in Australia on UK source pension income, as you cannot claim a tax credit in Australia for tax deducted under the PAYE system in the UK in respect of UK source pension income.

Best regards.