tofu

Hello, I am asking about how expats will be affected by the Personal Savings Allowance which lets UK taxpayers obtain up to GBP1000 in bank interest without having to pay tax. Banks will no longer be automatically taxing interest.

I have been in Australia for several years now but still maintain a UK current account and savings account (Australian address), in which my child support is deposited each month. I declare this on my Australian tax return as "target foreign income". I've not dealt with HMRC for a few years, after I ceased my self-employment status.

I do not consider myself to be a UK taxpayer anymore but do UK citizens come under the same personal allowance laws? Or do I have to declare this (nominal) interest as income to HMRC now? It is only about 2 pounds a month before tax! Or is it covered by the declaration I make every year to ATO?

Thankfully, I will be visiting the UK in April a few days after this all takes effect, so I suppose I will be able to get some advice there. While I am there, I think I'll just merge my accounts to one current account that gets no interest - may make life simpler

rammygirl

You are not tax resident in the UK so you simply declare it in Australia, the only difference will be that there is no UK tax to offset anymore.

Although they may decide to take tax from non residents at some point. For example Australian banks take a 10% withholding tax at source for non residents, and again the UK tax takes this into account. Currently UK tax allows even non residents a tax threshold but that may change.

Bermudashorts

That logic is not quite right, UK sourced income would generally need to be declared to HMRC (as well as ATO) resident or not, although there are some exceptions.

To original question, UK personal allowances are available to non resident British citizens at the moment.

rammygirl

I stand corrected, we actually do a return in the UK as we are still company directors. We claim back the tax on the interest interest as banks will not let us take interest gross atm, Nationwide do not accept the required form for overseas residents to do this. Then declare it in Oz. Or at least our dual accountant does!

I assume you only need to do a UK tax return otherwise if you exceed the personal allowance. I wonder if they will do the withholding tax thing, after all it does mean the UK will then get a cut of the tax. Seems like a good idea to me, I do think that Australia gets a better deal from non residents on tax than the UK.

Grayling

When we moved to Australia a big part our income was in sterling.

We informed HMRC when we left (possibly filled in some form) and they informed us that we would no longer be liablaxe for tax in the UK.

We never put in a tax return or declared our annual income.

When we returned we did the same in reverse.