daddyoconnor

Hi

We have been living here since July last year and my husband gets an army pension in UK which currently is staying in UK. I think we have to declare this to the Australian Tax people and start paying tax on it. But wasn't sure if we had 6 months to do this or not (which has obviously expired now) so keen to get it sorted. I am assuming if he pays tax on this here, we won't pay tax on it in UK is this correct. Anyone is the same boat and could give us some advice......
Many thanks

Bermudashorts

When people talk about moving and "pension" and "six months", they are referring to the rule that states no tax implications if an accrued pension pot is moved within six months. They are not talking about disclosing pension payments received.

The pension is taxable in Australia, you should declare it on your tax return at the end of the year and expect to pay tax on it. You need to let the UK pension people know that you have emmigrated and arrange to receive it gross, probably they have been deducting tax to date.

daddyoconnor

Yes they have - so hopefully the refund we get back from the UK end will almost cover the tax we will pay in July when we declare it to tax people this end.

Okay thanks for that - will need to contact the tax office in Uk and sort it out that end.

Alan Collett

http://www.hmrc.gov.uk/cnr/aust-comp2003.pdf

See also this form.

Best regards.

Kiwipaul

If you've paid tax on the pension income in the UK you declare that to the Oz taxman and you won't be taxed twice. So you can decide whether you pay tax in Oz or UK. Any tax paid in the UK is allowable against tax paid in Oz.

Bermudashorts

No an individual cannot decide where they pay tax. There is a double taxation treaty which determines which country the tax would be paid in and with respect to pensions, it is the country of residence.

OP needs to reclaim UK tax and pay it in Australia.

daddyoconnor

Thanks for the replies.

Alan thanks for forwarding that form. My husband did get those sent from the Tax office before we left - and we did pack them - however trying to find them is another matter. So really appreciate that

Kiwipaul

On the ATO site I found this

Did you:

receive income from foreign employment
receive a foreign pension or annuity
receive a lump sum payment from a foreign superannuation fund


You need to complete this item to claim a foreign income tax offset (formerly known as foreign tax credits) for foreign tax you have paid. See part H below.

http://www.ato.gov.au/content/00217564.htm

Which seems to indicate that foreign tax paid abroad is claimable. Do you have a link that supports your view.

Alan Collett

UK pensions received by Australian tax residents are only taxable in Australia under the terms of the Tax Treaty:

ARTICLE 17
Pensions and annuities
1 Pensions (including government pensions) and annuities paid to a resident of a Contracting State shall be taxable only in that State.

It is technically incorrect to claim a foreign tax offset on your Australian tax return for PAYE suffered on UK source pension income.

Best regards.

Alan Collett

You can only complete this form once you have an Australian Tax File Number - and the form must be sent to the ATO for stamping and onward submission to HM Revenue.

Best regards.

daddyoconnor

Hi Alan

Yes been here 8 months so have TFN's - so will get this completed and send to ATO. Thanks for your help.

Bermudashorts

Certainly. Double taxation treaty, article 17.

http://www.hmrc.gov.uk/pdfs/uk-australia-dtc.pdf

Kiwipaul

I now accept this advise is WRONG and UK tax on pension is NOT claimable in Oz.

Thats what this forum is all about LEARNING

asher

well it depends how much the pension, is my nursing pension is deemed too pitiable by Oz to tax so England have kindly said that as Oz won't bother they will generously carry on taxing it for me!!

Alan Collett

Hello asher.

I'd be looking to have no tax deducted on your pension in the UK - the fact that you have no liability to tax in Australia is a spurious argument.

Complete the form noted above, and you should receive your NHS pension tax free.

Best regards.