Pension lump sum transfer to Australia. Tax?
#1
Living the dream in WA
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Joined: Jan 2013
Posts: 315
Pension lump sum transfer to Australia. Tax?
Hi all
I've just found out that I've got a job in WA, not sure on start date yet, could be January, but am hoping for it to be April ish.
Anyway, my wife has been ill health retired from her job, and will be receiving a lump sum pension as well as a monthly pension payment. In the UK she gets this lump sum tax free, but as we're relocating to Aus, we want to move it across. I know we'll need to used a forex company to transfer the money across, but just wanted to know if we're going to get hit with tax in Australia? Hoping that if we provide the correct paperwork, we may not have to as it will significantly eat into what is essentially her 'pension', however it will be used to set us up over there. Or is there another way to do it?
Thanks in advance for your replies.
I've just found out that I've got a job in WA, not sure on start date yet, could be January, but am hoping for it to be April ish.
Anyway, my wife has been ill health retired from her job, and will be receiving a lump sum pension as well as a monthly pension payment. In the UK she gets this lump sum tax free, but as we're relocating to Aus, we want to move it across. I know we'll need to used a forex company to transfer the money across, but just wanted to know if we're going to get hit with tax in Australia? Hoping that if we provide the correct paperwork, we may not have to as it will significantly eat into what is essentially her 'pension', however it will be used to set us up over there. Or is there another way to do it?
Thanks in advance for your replies.
#2
BE Forum Addict
Joined: Jan 2003
Location: Brisbane
Posts: 1,576
Re: Pension lump sum transfer to Australia. Tax?
My understanding is that the lumpsum and income will have to be declared to the Oz taxman and it will be added to your income for that year (just like earned income).
It will also be taxed in the UK at 20% and so you have to inform the UK Taxoffice that it is being taxed in Ox and so you can get a refund of UK tax paid.
You can avoid the tax on the lump sum in Oz by transferring it into your wifes super as a concessional contribution (max allowed per year $30,000 (if over 55) and then it is taxed at 15%.
This is accurate to the best of my knowledge.
It will also be taxed in the UK at 20% and so you have to inform the UK Taxoffice that it is being taxed in Ox and so you can get a refund of UK tax paid.
You can avoid the tax on the lump sum in Oz by transferring it into your wifes super as a concessional contribution (max allowed per year $30,000 (if over 55) and then it is taxed at 15%.
This is accurate to the best of my knowledge.
#3
Re: Pension lump sum transfer to Australia. Tax?
Do you want to take the money and run, or transfer it into an Australian superannuation scheme? If you (or rather your wife) have a superannuation fund over here you can get your UK fund to transfer directly into Aussie super and there is no tax problem. Not sure whether the local super fund has to pay 15% to the ATO or whether the fact that it is a fund-to-fund transfer means the tax doesn't apply, on the basis that UK tax has already been paid.
I moved my UK company pension rights over to Oz as a lump sum several years ago, so I may not have all the details completely correct, but in general that's the way it works.
I moved my UK company pension rights over to Oz as a lump sum several years ago, so I may not have all the details completely correct, but in general that's the way it works.
#4
Re: Pension lump sum transfer to Australia. Tax?
Perhaps I'm missing something here, but why can't the lump sum be paid before you (or your spouse) become Australian tax resident?
Second, you've not told us what your visa will be, temporary or permanent - it might make a difference.
Second, you've not told us what your visa will be, temporary or permanent - it might make a difference.
#5
Living the dream in WA
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Joined: Jan 2013
Posts: 315
Re: Pension lump sum transfer to Australia. Tax?
I am an Aussie citizen, no visa required, and wife will be joining me on a spouse visa. It's being paid out now, she's 39 and I'm 41. Won't be going into another pension fund here or in Aus, we can do with it what we choose. It will be cash in our bank.
#6
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Joined: Sep 2013
Location: London
Posts: 21
Re: Pension lump sum transfer to Australia. Tax?
Hi gregster10217,
I believe Kiwipaul may be correct, but your best bet is to ask an Accountant just to make sure. I think there are different implications for anything under £10K, as you don't have to declare it, so it depends on how much you are looking to bring over as you could make a few transfers of £10K. Again though an accountant will know the answer.
Feel free to contact me regarding FX rates..
All the best
I believe Kiwipaul may be correct, but your best bet is to ask an Accountant just to make sure. I think there are different implications for anything under £10K, as you don't have to declare it, so it depends on how much you are looking to bring over as you could make a few transfers of £10K. Again though an accountant will know the answer.
Feel free to contact me regarding FX rates..
All the best
#7
Living the dream in WA
Thread Starter
Joined: Jan 2013
Posts: 315
Re: Pension lump sum transfer to Australia. Tax?
Thanks Dan. Will be in touch soon once we know how much and when.
#8
Re: Pension lump sum transfer to Australia. Tax?
Originally Posted by gregster10217
....she's 39 and I'm 41. Won't be going into another pension fund here or in Aus....
#9
Living the dream in WA
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Joined: Jan 2013
Posts: 315
Re: Pension lump sum transfer to Australia. Tax?
Thanks KJ. My wife has been ill health retired from work, and can effectively no longer work, although we hope that will change in the future. I have a pension over here which I'll be transferring over to a super fund, as well as contributing to it from day one of the new job. We won't be wasting this cash though, we know how important it is, so the majority will be invested into property once there after getting ourselves settled.
#10
BE Forum Addict
Joined: Jan 2003
Location: Brisbane
Posts: 1,576
Re: Pension lump sum transfer to Australia. Tax?
Their are no special provisions for sums less than $10,000 that I know of it's just that this is the limit at which the Oz gov is informed of the transfer (for money laundering). Transferring $9,999 ten times might avoid automatic notification but it also will make it look suspicious if they have ongoing monitoring to catch this sort of transaction.
#11
Living the dream in WA
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Joined: Jan 2013
Posts: 315
Re: Pension lump sum transfer to Australia. Tax?
Thanks Paul. How would we go about transferring it before my wife becomes a resident? It is just a case of opening an account in her name and moving it across, or is there more to it than that? Also, I'm not resident for tax purposes, yet, could I do the same, I.e. If we split it?
#12
Re: Pension lump sum transfer to Australia. Tax?
Thanks Paul. How would we go about transferring it before my wife becomes a resident? It is just a case of opening an account in her name and moving it across, or is there more to it than that? Also, I'm not resident for tax purposes, yet, could I do the same, I.e. If we split it?
#13
Living the dream in WA
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Joined: Jan 2013
Posts: 315
Re: Pension lump sum transfer to Australia. Tax?
We have thanks sparkles, and all should be fine!
#14
Re: Pension lump sum transfer to Australia. Tax?
That's good - was a little concerned when I read the post
As other's have said, hopefully she will get the lump sum before becoming resident. You could also try contacting Alan Collett - http://britishexpats.com/forum/member.php?u=2105 - who has a UK office and is able to provide advice on tax in both countries I believe
As other's have said, hopefully she will get the lump sum before becoming resident. You could also try contacting Alan Collett - http://britishexpats.com/forum/member.php?u=2105 - who has a UK office and is able to provide advice on tax in both countries I believe
#15
Living the dream in WA
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Joined: Jan 2013
Posts: 315
Re: Pension lump sum transfer to Australia. Tax?
Thanks sparkles. Obviously got to submit visa application, but the nature of the ill health retirement was not of concern to immi when my wife phoned and spoke to them.
I'll look up the link you post and take advice, thanks.
I'll look up the link you post and take advice, thanks.