Tom Pratt

My wife and I have had our Contributory Parents Visa since 2011 but have only just managed to get an offer on our house last week.

We reached 65 last year and both began to draw the State Pension whilst I have a Local authority Pension, a small annuity and a pension via the Pension protection scheme following the winding up of one of my employers.

Question is, when we get to Oz (fingers crossed): who will we pay tax to?, I believe that it will just be the Australian tax people. I understand that we will be entitled to double taxation relief?

Obviously we will be permanent residents.

It seemed so clear back in 2011 but the HMRC site seems a bit complicated now

louie

See this post.

Tom Pratt

Thanks, put my mind at rest :-)

Kiwipaul

Initially all your pensions will be taxed in the UK at 20% once you move to Oz. You then have to register to get a TFN to let the ATO know you are here and receiving income.

You then download this form from the UK aust-indiv2003.pdf‎

The link dosn't work so just google the name of the form

Complete and forward to the ATO (in Oz) who check it and forward it on to UK tax office. Once UK tax office verify it they will stop taxing you and refund all tax previously paid (since arrival in Oz).

You will then only have to pay tax on pension in Oz.

This is accurate to best of my knowledge as I'm in the process of doing exactly that at the mo.

JAJ

Additional comments, which you may wish to confirm with a tax professional, before taking any decisions:

- if you're planning to take a tax-free lump-sum from your pension, you may want to consider doing this before you become tax resident in Australia. As a tax resident in Australia with Australian citizenship/PR, you are liable to Australian tax on your worldwide income, whether brought to Australia or not. As far as I know, Australia does not necessarily consider these lump sum distributions to be tax free.

- Investigate something called the "Undeducted Purchase Price", since it may allow you to treat part of your pension payments as a return of your own capital and hence not subject to Australian income tax.

john in oz

Your comments on the lump sum component are correct. However tax is not on the full amount of the lump sum but just the earnings component that the lump sum represents as a proportion of the entire pension for the time that you are in Australia only.

cheers john

Tom Pratt

Thanks everyone for your replies, everything pretty clear now