Rideaway

Hi

I have done some searching but can't find anything.......

We are both on 475 visas and I am sure I read somewhere that the 6 month pension transfer tax rule doesn't apply to those on temporary visas - is that correct ?

We fully intend to make our move permanent but it would be great to know if this can be delayed.

Additionally, is there a pension transfer company where you are able to determine an exchange rate level ie 2.2 etc so you get the best returns for your pension 'pot' ?

Rideaway

Hi - any views on this ?

Fly Away

I believe that you have 6 months after you get PR to move the pensions etc. Before then, you are a temp resident and can't be taxed on pension increases in your 'home' country.

Alan Collett

That is my understanding too ...

Best regards.

Alan Collett

PS. Please send me a PM or email if you would like the name of our partner company that can assist with the transfer of UK pension benefits to Australia.

mkp

Hi all,
I reckon the 6 month windows starts from the first date of tax residency, not from the granting of PR. As a temporary visa holder, you are classified as a temporary tax resident. If the transfer occurs whilst you do not hold PR then there is no tax to pay and the 6 month window is not applicable. If you transfer whilst holding PR then the 6 month window (in my opinion) starts from the date of first arrival and not when PR is granted.
Hope this helps.
mkp

Alan Collett

Do you have any basis for making this comment, other than "reckoning" this is the position ...?

Best regards.

mkp

Hi Alan
The basis for my reckoning is as follows:

"305-60 Lump sums tax free—foreign resident period
A *superannuation lump sum you receive from a *foreign superannuation fund is not assessable income and is not *exempt income if:
(a) you receive it within 6 months after you become an Australian resident" Source:www.comlaw.gov.au

The ATO factsheet "Foreign income exemption for temporary residents - introduction" shows that you can be an Australian tax resident and a temporary resident at the same time, as follows:

"This fact sheet outlines recent changes to the law that apply to temporary residents. The changes may affect you if you are a resident of Australia for tax purposes and you also qualify as a temporary resident. If you are not a resident of Australia for tax purposes and you qualify as a temporary resident you will generally not be affected by the changes - unless you acquired shares or rights under an employee share scheme.

From 1 July 2006, you will not have to pay tax on most of your foreign income if you:
- are an individual who is a resident of Australia for tax purposes, and
- satisfy the requirements of being a temporary resident.

You are a temporary resident if:
- you hold a temporary visa granted under the Migration Act 1958
- you are not an Australian resident within the meaning of the Social Security Act 1991, and
- your spouse (if applicable) is not an Australian resident within the meaning of the Social Security Act 1991."

Therefore, my reckoning suggests that the 6 month window starts from the first date of residency, irrespective of visa. The subsequent tax treatment is then down to visa status.

Would you agree?

Cheers, mkp

torcraw

Remember that being "resident for tax purposes" is not the same as being a "resident for visa/immigration purposes". (and if the word "resident" is being quoted from the ATO website or documents, then that likely means "resident for tax purposes" - thus, six months from first date of "tax residency" - further backed up by the fact that this rule also applies to Australian citizens returning to live in Australia from abroad)

The general tax rule is that you're only taxable on your worldwide income if you're a "resident for tax purposes" (and then any specific regulations (e.g. temporary vs. permanent) would apply after that).

Fly Away

Also if you are on a temp visa and transfer your pension, in most cases, you can not transfer it back out of Australia - ever. So it would be unreasonable for the Government to insist temp visa holders did this within 6 months 'just in case' they got PR.