JoolsB

Just looking for a simple clarification pls

Am I right in saying that if you wait to exchange until after your arrival:

1) you pay tax to the Aus gov on the interest you have made (unless your funds have been been held in a UK account you have had since before 2003)

2) you also pay tax on any gain in the exchange rate you have benefited by

3) you only pay the above taxes if you exchange 6 months plus after arrival in Aus?

Thx!

JAJ

1. You pay tax on interest regardless, once you are Australia tax resident.

2. See this thread which discusses the issue:
http://britishexpats.com/forum/showthread.php?t=485444

3. 6 month issue only applies to certain pension schemes.

JoolsB

Thanks! So I pay tax on the interest in UK savings (taken directly from interest by the bank) and then more tax in Aus on the same interest as soon as I exchange. Getting taxed twice!-that doesnt seem fair

I read the above thread but confused me more! The tax I would pay on interest is 40%?

Sooty and Sweep

I am no adviser, so this is advice only, but this is my point of view;

All the information you require is in the thread JAJ pointed you to.

I have explained this out in detail with alot of help from JAJ.

You only pay tax once on your savings, dependent on where you are a resident.

01/01/01 to 01/01/02 UK Resident then pay tax to UK

02/01/02 to 01/01/03 OZ Resident then you pay tax to OZ

If either authority take tax and you are not a resident then claim it back, or if you leave the money on deposit in the country (UK) where you are not resident, fill out the correct form, and get your interest paid gross. You will then pay tax to the OZ authority in your end of year self assessment tax payment, by way of a percentage of the interest recieved on your savings held within the UK.

JoolsB

Ah-didnt realise you could fill in a form to get the interest paid gross. Thx thats helpful

Sooty and Sweep

No problem, this was the whole point of my previous thread, which JAJ pointed you to.

Some may wish to keep their savings on deposit in the UK, for the long term, until they fully feel settled, or due to a poor exchange rate?

So get your interest paid gross in the UK, pay tax on it to the Australian tax man, you are doing nothing wrong.

Then if you return home, your savings have remained in sterling, no hassle, or if you stay in the long term change your savings over to Australian dollars when you feel settled, feel you are not returning back to the UK, and/or the exchange rate is in your favour?


Some may not be able to do this as they need the money for a house purchase or to live on. But if you do not need the cash, why change it over as soon as you make the move, wait, things change, circumstances change, and so do interest rates and exchange rates?