Beoz

OK .... I am the worst tax accountant ever, but I'm trying to get a little serious with my tax.

So the Aussie tax thing needs to be submitted by the end of the month. I've got like 5 accounts in the UK and I'm trying to figure out how much interest I earned and how much the HMRC took and this is proving no easy task.

2 of my accounts are with Lloyds. One a current account and the other some online internet saver. The current account sends me a statement of interest earned and tax paid, the other, because its online sends nothing, there is nothing about tax paid on the internet banking, and the sweet scottish girl on the other end of the phone tells me she doesn't have access to that info.

So how do the rest of you go about figuring out all this, even before you can take it to an accountant? Do you actually bother or just throw it in the "too hard" basket?

Grayling

Why do you pay any tax in the UK?

What visa are you on?

JAJ

Generally, 20% tax will have been taken from any interest earned. So you take the amount received, multiply by 1.25 and you get to the gross amount. You should declare the full amount for Australian tax (unless in some cases, if you are on a temporary visa), and then take a credit for the foreign tax.

It's probably not going to be very much, with interest rates so low. If it's a lot, then perhaps you should pay an accountant to make sure it is done correctly.

Unless by some chance the account is an ISA, then no tax is deducted and you simply pay Australian tax on the full amount.

Beoz

Dual citizen ..... One Lloyds "annual interest summary" I have here says that there was an amount of tax deducted from interest earned whilst I am living in Oz. Should I have not paid tax on that?

Grayling

You can opt to pay no tax in the UK.

As JAJ says......if it is a significant amout then professional advice wis best

Beoz

That's the thing. It's not a lot but it's spread over accounts and seeking the relevant info is not easy. The other thing that is painful, some accounts send the annual interest summary between the UK tax date - April - April. How do you calculate the interest earned and tax paid in UK between April - July?

I am going to an accountant but I though I better get this all in order before I go - or am I trying to look at it in too much detail?

Beoz

Golf course looking good

Beoz

Is that what most do and does it make tax time easier?

JAJ

Discuss with an accountant to be sure, but the simplest approach is to treat the interest as received when it is credited to your bank account. So if you are credited monthly, then add up the 12 payments for the relevant months. If annually, then for Australian purposes take the payment that is credited between 1 July and 30 June.

It's not that hard ...

It's not really possible any longer to register for gross interest in the U.K.. It's still allowed but most onshore banks don't accept the forms for non-residents (you can still have the account, but they won't register it for interest without tax). It doesn't really make any difference to your Australian tax filings except you wouldn't then have to take account of a foreign tax credit.

Beoz

I'm sure its not that hard, but it's costing me time in finding out all this info and as you rightly say, the total interest earned isn't anything significant.

Some of the accounts I have won't let me browse back beyond 3 months so therefore, falling short of phoning the bank, I have no idea how much interest I earned, and when I do phone the bank, it was so long since I used the service, I've forgotten the phone bank password.

Just back to the original title - logisitics - I'm finding the logistics nightmare for so little. Perhaps I need to consolidate the accounts just to help the taxman

Grayling

It is what you can do and it makes tax time easier although you still have to declare the amount to the ATO.

It depends on individual circumstances.

Beoz

Ok ... Got a bit bored so 'went down the beach'. Saw Hugh Jackman down there. Anything to avoid accountancy

JAJ

So ask the bank to reset the password. It's not that difficult.

Online bank accounts that don't let you look back more than a few months aren't much good. And you must have some idea what the interest is, if you know how much of your own funds you put into the back.

You are probably making this a lot harder than it needs to be. If you know it's only a few dollars and don't have the exact amount, and can't get the exact amount, estimate it (and add some extra dollars to cover any mistake). That's a better option than declaring zero. But you probably can find out the exact amount. As long as you sign up with a tax agent before the end of October, you can normally have an extension to file your tax return.

Longer term, you should consider where you want to keep your funds. If the compliance aspect of tracking the interest on funds outside Australia is too difficult for you, then perhaps you should move the funds to Australia.

Beoz

So you think a bit of rough estimating is OK? Happy to do that rather that spend days on figuring out the exact.

I think I need to have a word with the banks. If they can't figure out a way to make an annual interest summary easier to obtain then I need to find a bank that can. Lloyds did warn me before I moved that they are no fun to work with from abroad. HSBC are much easier.

As for moving pounds to Oz right now ...... Not a chance.

JAJ

Your tax return is your responsibility - no one else's. It's not whether I think it's OK, it's whether it's truthful and is something that an ATO auditor will accept. They probably won't care if you declare more interest than you need to, but will be quite upset if you declare less. Usually people only estimate when they cannot find an accurate amount and it is normally advisable to err in the ATO's favour if you have to do this.

Either way - you can't ignore the fact that you have foreign income and have to declare it, no matter how time consuming you may find the record keeping.

You probably won't get an annual interest summary in line with the Australian tax year, as it's different to the United Kingdom. So - you are just going to have to keep all your statements and add up the correct amounts.

That is a consequence of your decision to keep your funds outside Australia. As long as that persists, your tax affairs will be more complicated than they might otherwise be.