Military Pension Tax - How Much!!!
#1
Military Pension Tax - How Much!!!
Anyone else received a rather large tax bill for 05-06?
Just been hit with a bill for $6500:curse:
Colin
Just been hit with a bill for $6500:curse:
Colin
#4
Re: Military Pension Tax - How Much!!!
Colin do you work as well as the pension otherwise you have just sent my husband into orbit.
we are hoping to move later this year and he will have a pension of around £14.500 ($35,000)and was told by friend that you dont pay full tax in both locations!!!!!!!!!
jill
we are hoping to move later this year and he will have a pension of around £14.500 ($35,000)and was told by friend that you dont pay full tax in both locations!!!!!!!!!
jill
#5
Re: Military Pension Tax - How Much!!!
You should only pay tax in the country you are resident in. If you are living in Australia, then you are liable for tax in Australia on your worldwide income at the folowing rates:
http://ato.gov.au/individuals/conten...u=5053&mfp=001
More info here:
http://ato.gov.au/individuals/conten...tent/64131.htm
Whether or not you pay tax in the UK I'm not sure, but any tax you did pay there I would presume you'd be able to receive as a credit against your Aus tax.
#6
Forum Regular
Joined: Apr 2007
Location: Toowoomba, Queensland
Posts: 136
Re: Military Pension Tax - How Much!!!
You can apply for tax relief at source for military pensions. Form P85 rings a bell, but it is all on the UK IR website. It's because the UK and Aus have a double taxation agreement so you only get taxed once.
Was you not declaring the pension income into Oz? It's bound to catch up with you! Not worth the risk IMHO!
Was you not declaring the pension income into Oz? It's bound to catch up with you! Not worth the risk IMHO!
#7
Re: Military Pension Tax - How Much!!!
http://www.ato.gov.au/content/downlo...RevenueFD2.pdf
The form should be sent to the Aussie tax office, who will forward it to the UK Inland revenue-i think.
If you have any other queries, try contacting the paymaster general in the UK. They deal with the payments of Forces pensions, just google them.
Cheers
Neil
#8
Re: Military Pension Tax - How Much!!!
Thanks for the reponses guys.
More detail:
a.UK pension (Approx UKP9000) declared in Oz from day 1 - Nov 04
b.UK tax paid in UK on pension.
c.Credit for tax paid in UK included in Oz return.
d.Oz Army wages taxed at source = Tax refund after expenses.
e.UK rental small loss.
f.Oz tax @ 42% on pension - not 43.5% as stated by accountant
I haven't received the paperwork yet, just a phonecall from a nervous accountant!! Hoping to find an error in his calculations.
Cheers
Colin
More detail:
a.UK pension (Approx UKP9000) declared in Oz from day 1 - Nov 04
b.UK tax paid in UK on pension.
c.Credit for tax paid in UK included in Oz return.
d.Oz Army wages taxed at source = Tax refund after expenses.
e.UK rental small loss.
f.Oz tax @ 42% on pension - not 43.5% as stated by accountant
I haven't received the paperwork yet, just a phonecall from a nervous accountant!! Hoping to find an error in his calculations.
Cheers
Colin
#9
Forum Regular
Joined: Apr 2007
Location: Toowoomba, Queensland
Posts: 136
Re: Military Pension Tax - How Much!!!
Colin,
If you are having to question the accountant's figures and facts, I'd say you are employing a duffer!!! Sack him/her and get a different one who is able to do simple research.
As a military man, you will be on a permanent resident visa with citizenship after 90 days, so you will have been classed as a perm res from day 1 of arriving, which mean't all of your military pension from the UK should have been declared to the oz tax people. Paying tax at source in the UK does not offset this responsibility to the Oz tax establishment, as it is still classed as an extra income, on top of your military salary.
What I'll be trying to find is a way of reducing the pensionable income legally, to avoid going over the $75,000 tax threshold, which might prove quite tricky, as my pension will be worth around $25,000 a year and my base salary will be $60,480 when I start with the ADF in November this year!
If anyone can help on this front, it would certainly be appreciated by quite a few of us I imagine! Just witholding it in a UK bank account is not good enough, and neither is it legal, as it is then not being declared to the Oz tax people. They will catch up eventually, and it will probably end any military career due to lack of integrity and honesty.
Please keep us informed of how it goes, as I will be interested in the outcome.
If you are having to question the accountant's figures and facts, I'd say you are employing a duffer!!! Sack him/her and get a different one who is able to do simple research.
As a military man, you will be on a permanent resident visa with citizenship after 90 days, so you will have been classed as a perm res from day 1 of arriving, which mean't all of your military pension from the UK should have been declared to the oz tax people. Paying tax at source in the UK does not offset this responsibility to the Oz tax establishment, as it is still classed as an extra income, on top of your military salary.
What I'll be trying to find is a way of reducing the pensionable income legally, to avoid going over the $75,000 tax threshold, which might prove quite tricky, as my pension will be worth around $25,000 a year and my base salary will be $60,480 when I start with the ADF in November this year!
If anyone can help on this front, it would certainly be appreciated by quite a few of us I imagine! Just witholding it in a UK bank account is not good enough, and neither is it legal, as it is then not being declared to the Oz tax people. They will catch up eventually, and it will probably end any military career due to lack of integrity and honesty.
Please keep us informed of how it goes, as I will be interested in the outcome.
#10
Re: Military Pension Tax - How Much!!!
Colin,
If you are having to question the accountant's figures and facts, I'd say you are employing a duffer!!! Sack him/her and get a different one who is able to do simple research.
As a military man, you will be on a permanent resident visa with citizenship after 90 days, so you will have been classed as a perm res from day 1 of arriving, which mean't all of your military pension from the UK should have been declared to the oz tax people. Paying tax at source in the UK does not offset this responsibility to the Oz tax establishment, as it is still classed as an extra income, on top of your military salary.
What I'll be trying to find is a way of reducing the pensionable income legally, to avoid going over the $75,000 tax threshold, which might prove quite tricky, as my pension will be worth around $25,000 a year and my base salary will be $60,480 when I start with the ADF in November this year!
If anyone can help on this front, it would certainly be appreciated by quite a few of us I imagine! Just witholding it in a UK bank account is not good enough, and neither is it legal, as it is then not being declared to the Oz tax people. They will catch up eventually, and it will probably end any military career due to lack of integrity and honesty.
Please keep us informed of how it goes, as I will be interested in the outcome.
If you are having to question the accountant's figures and facts, I'd say you are employing a duffer!!! Sack him/her and get a different one who is able to do simple research.
As a military man, you will be on a permanent resident visa with citizenship after 90 days, so you will have been classed as a perm res from day 1 of arriving, which mean't all of your military pension from the UK should have been declared to the oz tax people. Paying tax at source in the UK does not offset this responsibility to the Oz tax establishment, as it is still classed as an extra income, on top of your military salary.
What I'll be trying to find is a way of reducing the pensionable income legally, to avoid going over the $75,000 tax threshold, which might prove quite tricky, as my pension will be worth around $25,000 a year and my base salary will be $60,480 when I start with the ADF in November this year!
If anyone can help on this front, it would certainly be appreciated by quite a few of us I imagine! Just witholding it in a UK bank account is not good enough, and neither is it legal, as it is then not being declared to the Oz tax people. They will catch up eventually, and it will probably end any military career due to lack of integrity and honesty.
Please keep us informed of how it goes, as I will be interested in the outcome.
My accountant is not a duffer and sadly I know his figures will be correct - He also handles my business accounts.
I will also be looking for ways to offset my UK income for future tax returns.
Cheers
Colin
#11
Re: Military Pension Tax - How Much!!!
Thanks for the reponses guys.
More detail:
a.UK pension (Approx UKP9000) declared in Oz from day 1 - Nov 04
b.UK tax paid in UK on pension.
c.Credit for tax paid in UK included in Oz return.
d.Oz Army wages taxed at source = Tax refund after expenses.
e.UK rental small loss.
f.Oz tax @ 42% on pension - not 43.5% as stated by accountant
I haven't received the paperwork yet, just a phonecall from a nervous accountant!! Hoping to find an error in his calculations.
More detail:
a.UK pension (Approx UKP9000) declared in Oz from day 1 - Nov 04
b.UK tax paid in UK on pension.
c.Credit for tax paid in UK included in Oz return.
d.Oz Army wages taxed at source = Tax refund after expenses.
e.UK rental small loss.
f.Oz tax @ 42% on pension - not 43.5% as stated by accountant
I haven't received the paperwork yet, just a phonecall from a nervous accountant!! Hoping to find an error in his calculations.
Key point to remember with foreign income is that Australian tax is not deducted at source, so you do get a bill all at once which can be nasty if you have not prepared for it. The ATO will probably put you on instalments for future tax years to stop the same thing happening again.
Last edited by JAJ; May 8th 2007 at 12:38 am.
#12
Account Closed
Joined: Jan 2003
Posts: 759
Re: Military Pension Tax - How Much!!!
Colin,
If you are having to question the accountant's figures and facts, I'd say you are employing a duffer!!! Sack him/her and get a different one who is able to do simple research.
As a military man, you will be on a permanent resident visa with citizenship after 90 days, so you will have been classed as a perm res from day 1 of arriving, which mean't all of your military pension from the UK should have been declared to the oz tax people. Paying tax at source in the UK does not offset this responsibility to the Oz tax establishment, as it is still classed as an extra income, on top of your military salary.
What I'll be trying to find is a way of reducing the pensionable income legally, to avoid going over the $75,000 tax threshold, which might prove quite tricky, as my pension will be worth around $25,000 a year and my base salary will be $60,480 when I start with the ADF in November this year!
If anyone can help on this front, it would certainly be appreciated by quite a few of us I imagine! Just witholding it in a UK bank account is not good enough, and neither is it legal, as it is then not being declared to the Oz tax people. They will catch up eventually, and it will probably end any military career due to lack of integrity and honesty.
Please keep us informed of how it goes, as I will be interested in the outcome.
If you are having to question the accountant's figures and facts, I'd say you are employing a duffer!!! Sack him/her and get a different one who is able to do simple research.
As a military man, you will be on a permanent resident visa with citizenship after 90 days, so you will have been classed as a perm res from day 1 of arriving, which mean't all of your military pension from the UK should have been declared to the oz tax people. Paying tax at source in the UK does not offset this responsibility to the Oz tax establishment, as it is still classed as an extra income, on top of your military salary.
What I'll be trying to find is a way of reducing the pensionable income legally, to avoid going over the $75,000 tax threshold, which might prove quite tricky, as my pension will be worth around $25,000 a year and my base salary will be $60,480 when I start with the ADF in November this year!
If anyone can help on this front, it would certainly be appreciated by quite a few of us I imagine! Just witholding it in a UK bank account is not good enough, and neither is it legal, as it is then not being declared to the Oz tax people. They will catch up eventually, and it will probably end any military career due to lack of integrity and honesty.
Please keep us informed of how it goes, as I will be interested in the outcome.
Would probably be a good idea to look at salary packaging - I think in the ADF you'll be able to package a car and maybe additional super contributions? I think the ADF use Smart Salary http://www.smartsalary.com.au/
Definitely worth a look if you're in the higher income bracket.
#13
Re: Military Pension Tax - How Much!!!
My pension and UK rental income is paid into my UK account to cover mortgage etc. etc.
My personal allowance may be part of the problem. I am using my personal allowance in the UK which naturally limits the amount of tax paid in the UK. As far as I am aware my UK allowance is not used in the Oz calculation.
Hopefully you will correct me.
Cheers
Colin
#14
Account Closed
Joined: Jan 2003
Posts: 759
Re: Military Pension Tax - How Much!!!
Why are you paying any UK tax? Have you factored in your UK personal allowance?
Key point to remember with foreign income is that Australian tax is not deducted at source, so you do get a bill all at once which can be nasty if you have not prepared for it. The ATO will probably put you on instalments for future tax years to stop the same thing happening again.
Key point to remember with foreign income is that Australian tax is not deducted at source, so you do get a bill all at once which can be nasty if you have not prepared for it. The ATO will probably put you on instalments for future tax years to stop the same thing happening again.
#15
Re: Military Pension Tax - How Much!!!
I am now dreading submitting my 06-07 return!! Luckily the rates have dropped for 06-07, which should make it slightly less painful.
Colin