suggs

Good afternoon,

I have a question for anybody who has savings in the UK based institution, while living as a permanent tax resident in Australia.

What is the best or correct option?

1. Gross Only - No UK Tax paid - No OZ Tax paid - Nice Hey?
2. Gross in UK - Tax Only paid in Oz – P85 Form submitted to the HMRC
3. Pay Tax in UK at 20% – Claim Full UK Allowance Back – Pay No Tax in OZ
4. Tax in UK at 20% - Claim No Allowance Back in UK – Pay No Tax in Oz

If I leave the UK on the 30th October 09; so become a non UK tax resident on this day, can I on this day put in my P85 form, savings accounts, so receive my interest tax free from this day, is this correct.

But does the taxation owed to me by HMRC (full year allowance) for the overpayment of tax paid for the tax year 09/10, between the 5th April 09 to 30th October 09, still calculated using my full years allowance and still apply, even though I am leaving my money in the UK and receiving the interest tax free as I am paying the ATO what I owe them from the 1st November as this is the date I become a OZ tax resident?

Even though I am leaving my savings in this country, and receiving the interest gross, are the calculations still the same for repayment of tax due to overpayment for year 09/10 due to your personal allowance for year 09/10, obviously you have to had made an overpayment?

Which leads me to my next question; if I get my interest paid gross, because I am no longer a UK based tax resident. At the start of a new tax year, even though my savings are still in this country earning interest, because I receive my interest gross, P85 form submitted, I will not be entitled to my tax free allowances, as I pay no tax in the UK, is this correct?

I have come to the decision that, my savings are safer UK onshore, whether I receive the interest gross in the UK, and pay the ATO what I owe them, or receive the interest net in the UK, so claim back my tax free allowance in the UK, and pay the ATO what I owe them with regards to the difference bewteen what i have paid in the UK after claiming back my personal allowance and what i owe the ATO.

Well the overall tax paid to the ATO will be the same??

So it is less hassle getting my interest paid gross, and not having to claim back my tax free allowance in the UK, while still have to owe the ATO the difference.

Do you all agree with my assumption?

Its just in Australia, I will owe a fixed amount at the end of the tax year to the ATO; so they will get their cut either way, whether I get gross or net interest in the UK, the difference after I claim my tax free allowance in the UK will be equal the full amount I owe to the ATO if I had received my interest gross in the UK and only paid the ATO tax?

Has anyone got any experiences with all of this?

Any help would be most appreciated.

Suggs

JAJ

You need to pay Australian tax regardless, if you are tax resident in Australia (and not a temporary resident).

suggs

Depends;


3. Pay Tax in UK at 20% – Claim Full UK Allowance Back – Pay No Tax in OZ
4. Tax in UK at 20% - Claim No Allowance Back in UK – Pay No Tax in Oz

You have already paid tax in the UK on your savings, also see my other threads, all institutions it seems will only pay interest after 20% source tax.

So for me i will have to pay my tax in the UK, claim my tax free allowance in the UK at the end of the tax year, and even though i am a permanent resident in Australia, they the ATO will see none of my tax on my savings, because it seems the UK goverment are unwilling to let savers recieve their interest gross, when they have an overseas address?

BTW, my savings interest will be my only income in Australia, well apart from dipping into the capital to make ends meet.

Suggs


http://britishexpats.com/forum/showthread.php?t=609488




.

JAJ

You have to pay Australian tax at your marginal tax rate, which can be over 40%. If you do pay U.K. tax, you will get credit for it.

suggs

Umm, 40% hey? This makes me laugh because depending on the exchange rate, creates a number of permitations? Also, not really me, but, i can imagine many on here past and present, tell as little as possible to the ATO regarding overseas income from savings, my experience of HMRC is they struggle to contain income from savings and detecting individuals who sole income comes from savings, their radar is not what it should be, well lets say the final figure owed is never really the reflection on what has been earned? So the ATO, their systems i can imagine are light years ahead of HMRC?

Suggs.


P.S. Some of the post's on here i have read, well it would seem some posters are just causing them self problems, maybe me?

JAJ

It's not rocket science.

Convert the interest to Australian dollars and include it on your tax return. If you don't, and you get audited, it will be your problem.

suggs

http://britishexpats.com/forum/showthread.php?t=609488

So to my original post and thread above, what do you recommend?

Suggs

JAJ

Many British banks no longer accept non-resident declarations because they would prefer to channel business to their offshore subsidiaries.

If you are deducted interest from an onshore account, and they don't allow you to have it paid gross, you can file a U.K. tax return to reclaim it. Or there may be a simpler way to reclaim interest directly from HMRC.

suggs

The problem arises when you are here in the UK, an alright size of capital, nothing fancy; you just want to preserve it?

Prior to joining this forum I read alot, especially this forum, Forex gains, best options, best returns, but for me, the unread posts, the unspoken posts, the black economy posts do not give advice.

At the end of the day you have to ask yourself, "Why the hell are you asking such complex advice on such a public forum"

You spend twenty years slogging, two years selling recouping, and then ask a load of strangers for advice on what to do?

I know JAJ thank you for you input, if you read my threads I started, well at least you had the heart to reply, I suppose it’s my own fault looking for answers on here, hoping that the majority had been through similar circumstances or predicaments?

Suggs