Auzziebound

Have you retired to Oz and claiming a UK old age and / or private pension?

If so, would you care to share your experience with me? How did you dealt with your payments, what did you do and what you would do differently if you had the chance.

I have found out the the basis old age pension can be paid into a bank in Oz every 4 or 13 weeks vis the Bank of Scotland. However, I am in the process of finding out if the private pension provide can also do the same.... and if so how did the exchange rate effect your regular payments?

Did you use a company like Ozforex to exchange you pension on a regular monthly, quarterly or yearly basis?

I would appreciate any advice on this subject so that I can let my parents know what options they have open to them.

Thanks in advance.
Jane

Mandy&Cliff

Bump

clivefawcett

Hi you need to get a form from the Inland Revenue 0845 0700040 or +44 151 210 222 and ask for Form Australian/Individual 2003 (FD2). This will allow your pension to be tax free in the UK and sent to your Aus bank account. Hope that helps a little.

Wol

Jane;

I believe the state pension can be paid direct to Australia but I don't know the procedure. Mrs Wol's is paid into Barclays in the UK (or *was* - it hasn't appeared for 12 months! It's a whopping £0.18 a week.........)

A private pension can be paid into your UK account and a firm like OzForex used to transfer either monthly or in chunks. My own pension was done this way for a year with another company but then my old employer's pension scheme signed a contract with Bank of New York to send overseas pensions to the various countries in blocks, BoNY to exchange at a good rate and put it into the individual accounts.

The BoNY rates proved to be awful - so I now have OzForex receiving my monthly pension from the pension scheme and exchanging it into my Oz account.

There are many ways of doing it, on each you will "lose" money - quite serious money over a year, actually - and if you do it in chunks you can find the tax calculations a real pain!

supersonic4

If you are staying there perm,why don't you transfer the whole pension to a Aussie fund then you wouldn't lose on swapping it over to AUssie.
Cheers John

Wol

You can't do that if you are actually receiving the pension.

Auzziebound

I'll get onto them right away. Does the relate only to the 'old age pension' or for private pensions as well?

Thanks
Jane

Auzziebound

Thanks Wol. I'll look into get signed up with OzForex then. Did you sign up to a yearly contract to agree an exchange rate or do you have negotiate each time to want to transfer money?

As for the tax issue, in your opinion would a monthly or quarterly transfer would be easier for calculation purposes then?

Regards
Jane

marker

If the UK pension is small they only pay annually.

But do you get a forward rate for the year like hifx or the rate each month?

Regards

Alan Collett

Remember that from 1 July 2006 if you are a "temporary tax resident" of Australia UK source pension income is NOT assessable in Australia and is taxable in the UK under the PAYE system.

Best regards.

Auzziebound

So would the pension be taxed again in Australia or if evidence was provided that the pension had already been taxed in the UK, would it be exempt from taxation in Oz?

I spoke to someone at the Inland Revenue today and she said that if Mum & Dad had a permanent visa they would not tax their pensions in the UK but would in Oz.

She also said that during the period of my parents holding a temporary visa, if any tax charged in Oz against their pensions, they could claim the tax back that was charged in the UK. Is this correct?

I've got a feeling that I'm not fully understanding this taxation business.....!!

Thanks
Jane

Alan Collett

From 1 July 2006, if a "temporary tax resident" of Australia receives UK source pension income it is wholly taxable in the UK. As such I'm not sure the 3rd paragraph in your posting is correct, Jane.

Best regards.

Wol

I had forward contracts with HIFX - for the first year I did quite well but the second six month one lost quite a bit - they only gave me 2.22 and the rate was 2.3 - 2.45. Overall I came out evens I suppose.

With OzForex I leave it for them to exchange at the daily rate. Because I was a reasonably regular customer they give me a good rate: they email me when the money is in and it goes straight into my HSBC account here.

If you send it in lumps it's probably easier monthly from the tax view: you are supposed to calculate any gain or loss from the time of receipt to the time of transfer and work that in as well - if it's transferred straight away I don't see any reasonable person quibbling over ignoring that side of things!

marker

I just transfer ad hoc and hopefully when the rate is higher rather than lower. My understanding is that for tax purposes you have the option of declaring the value at the exchange rate on day of receipt, or the average monthly or annual exchange rate irrespective of if and when the funds are transferred to Australia. For me the annual rate works best for 2005/6 tax year. So no other gain or loss figures are needed.

Regards

Wol

But you still have to get the figures and work them to find out which is better!

The ATO told me the other day that I could just declare the amount I received in dollars: this was after I asked if I could claim the amount "lost" because of the difference in the actual rate I get each month and the ATO rate on their website for the same day. It's not a "ruling" but in a swings and roundabouts way it has to be sensible.