Jen1977ni

Hi, as some of you are aware, I was a Part-Time PSNI (police) Officer back in Northern Ireland and there is a gratuity scheme which we're all entitled to a certain amount of - http://www.bbc.co.uk/news/uk-northern-ireland-11710888 - I have since heard from a colleague that they're intending to take tax and national insurance off us, will I have to pay both of these even if I'm non-resident? Just curious....

geordiebloke

Would have thought you would have to declare it as part of your Aussie income and not be liable to pay anything to the UK but maybe because you earned it whilst in the UK, the tax man there will want his cut
In other words, I have no idea

Jen1977ni

lol k

Bermudashorts

My word, talk about goobledygook in the double taxation agreement. (See attached article 14).

Looks like as you carried the work out whilst you were present in the UK, you are liable for UK tax. I don't think that it being a gratuity would make any difference to that.

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

Just to add, it would of course go onto your tax return with your rental income and you could get it back if below personal allowance.

Jen1977ni

I'll probably keep it in my UK account, as now that it's being taxed and NI'd there'll probably be bugger all, so will I be taxed on it here? I'll just be using it for pressies for people in the UK and expenses linked to my house!?

Also, on a side note, my house in the UK, my tenant is moving out and I haven't got a new one yet, so I'll be paying next months mortgage myself, can I include that in my Aussie Tax Return like I did for expenses linked to the house last year?

Bermudashorts

You will not pay tax on the same income twice, any tax you pay in UK will be used as a credit against your tax bill in Australia.

My house is going to be empty from end of this month too, I have every intention of putting the mortgage interest down as an expense regardless, on grounds that it is available for rent.

Jen1977ni

I can't really complain as it's been let for the last 15 months, but still, let's hope a new tenant is found quickly! lol My mortgage is interest only anyways...

Rambi

You shouldn't get hit with NI when you are out of the country. Even people working in Sealand are exempt from NI

You will have your personal tax allowance in the UK.

If you want to keep things above board then you should check with the ATO if they are interested. You won't get taxed twice you just pay a top up if the Aussie tax is higher.

If the property is still going to be a rental you can still claim expenses and the ATO allows rental losses to be deducted against all income.

Jen1977ni

So how do I not pay NI then, who do I contact?

Rambi

Not sure. I would be surprised that NI would be stopped as you are not an employee. If it is then you could get a refund by doing a tax return.

Bermudashorts

Tax returns concern income tax not NI, it won't be possible to get an NI refund through a tax return.

Jen1977ni

How then?!

Bermudashorts

No idea, I have never heard of anyone even trying to do it, NI refunds are rare. I am not convinced that NI is not owed in this case myself, UK employment carried out in UK ...

Jen1977ni

I'm no longer employed though, and this gratuity is from the government in recognition of the risks we took doing the job...

Rambi

Are you sure?