UK Private Pension in Oz
 

I am 65 and retiring shortly and a permanent resident in Oz. My UK company pension will be paying me about 6k pound per year, in monthly payments, into my Oz bank, plus state pension of about 500pound per month into same. My UK company pension have advised me they have passed my info onto HMFC who will send me a P161 form-do I, or will I pay UK tax on both company/state pensions?:frown:

Re: UK Private Pension in Oz
 

No, not if you have a permanent resident visa. They will both be taxed here.

Re: UK Private Pension in Oz
 

Once you've retired abroad, even if you're classed as being 'non-resident' for tax in the UK, you'll still pay tax on most pensions you receive from the UK. However if you're living in a country that the UK has a ‘double taxation agreement’ with, [eg: Australia] you may be able to get these pensions without Income Tax being deducted. You may also be able to claim a refund of any tax which has already been deducted.

Making a claim under a double taxation agreement
http://www.hmrc.gov.uk/international/dta-claim.htm
and look for:
Form Australia-Individual 2003 - United Kingdom/Australia Double Taxation Convention (SI 2003 Number 3199)


http://www.hmrc.gov.uk/pensioners/paying-abroad.htm

Re: UK Private Pension in Oz
 

Totally agree with ABCD.

Your private pension will be taxed at 20% by IR until you submit a form (see ABCD reply) proving you live in Oz and then they will remit the full amount to Oz.
Takes about 2 months from the time you submit the form until you receive the money without tax being deducted.

Still waiting for the tax already paid to be refunded (applied end Feb 2014).

And yes you will have to declare it to ATO and pay tax on it.

Re: UK Private Pension in Oz
 

Hi, Lesleys;ABCD & kiwipaul-many thanks for all your replies!

Re: UK Private Pension in Oz
 

Hi, Sorry to be a nuisance! the ATO advise me that I need to complete a Supplementary tax form for 2014. Apparently, I can claim UPPs (Undeducted Purchase Price) from my State Pension-As anybody else had this UPP to deal with? My query is that I, apparently, cannot deduct UPPs from my BG Private Pension. I have spoken to the ATO and they don't seem to have the answer either!

Re: UK Private Pension in Oz
 

This may help on UPP

https://www.ato.gov.au/Super/APRA-re...itish_pensions

Re: UK Private Pension in Oz
 

Hi Spottydog, Thanks for the link-as I now understand it's only the State Pension I can deduct UPP-not the BG pension. Oh Well!

Re: UK Private Pension in Oz
 

Well done on getting as far as you did with the ATO - I'm Australian but don't mind saying it has THE most convoluted website I've ever had the misfortune to encounter. Whoever develops their info and documents could do with some training in plain English!

Re: UK Private Pension in Oz
 

Hi Spouse of Scouse, I don't know whether to laugh or cry when dealing with the ATO-From my experience dealing with the ATO-anybody you speak to on the phone wants to help but, nobody seems to know what I'm supposed to do to complete my tax return! It's just so b...frustrating. If I make a mistake, the ATO will be the first to point it out no doubt. If anybody out there who knows someone who works at the ATO can they please tell them the system needs a shakeup as people like me, simple soul that I am, are going crazy trying to do the right thing.

Re: UK Private Pension in Oz
 

Hi goslar1961,
Just a couple of points you might not be aware of.
State/government pensions in the UK - police, teachers, councils etc are NOT included in double taxation agreements and states so on HMRC website. These therefore cannot be paid gross in OZ, or any other double taxation agreement country.
I also think that UK state pensions paid to OZ residents no longer qualify for the annual increase -believe the OZ government withdrew from the bi lateral agreement a few years ago. ( hope i'm wrong on this!)
If your State pension is above the UK tax free allowance - as mine is due to SERPS and a couple of other old UK government schemes - then you still have to pay UK tax on it. The catch is, that by law the UK government is not allowed to take tax off State Pensions so will take it off any private pensions you have.

If the foregoing is teaching you to suck eggs , then I apologise in advance!:o

Re: UK Private Pension in Oz
 

Just reread OP post. If your State pension is only £500 per month then you are below the UK tax free allowance and it will be paid as is, since you will elect to be taxed on your total income in OZ.
Teach me to read a bit more carefully before putting pen to paper!

Regretfully my State pension is double this so I cannot avoid paying some UK tax.both my wife's pensions are UK government pensions so all her income is taxed in the UK.(They take tax due from her Teachers pension each month)

Re: UK Private Pension in Oz
 

Hi Quiltman, Thanks for your comments-As per previous replies-I am going to send a 'double taxation" form to HMRC in UK so they will not take any tax in the UK. I'll never understand in a million years why you have to complete a tax return in Oz-haven't they got enough public servants to do the job? I don't mind doing tax returns it's just the lack of direct information which frustrates me. Even if you go to a tax adviser to help you-they usually have no idea what to do when it comes to UK pensions etc.

Re: UK Private Pension in Oz
 

Lots of good advice here - You can also look at the possibility of transferring the entire Company Pension to OZ before you take it as a pension too. This then allows you to access 100% of your funds rather than ongoing payments through an annuity.

Then there are tax savings considerations in OZ - However if you over 65 years of age then there are issues with Contributions caps to be taken into account as well.

Remember that current proposed changes to pension rules from April 2015 will allow you to access your funds 100% from age 55 years onwards.

I hope that helps cheers john

Re: UK Private Pension in Oz
 

Hi John in Oz, Thanks for the info. I've already started to receive monthly payments from my private (BG) Pension-so I think that possibility is now dead!

Re: UK Private Pension in Oz
 

First the caveat emptor! We all try and help, but individuals' circumstances vary so always double check our replies!

I was not aware of the bit about government employees' pensions being treated differently, so what follows is only my own experience.

The state pension is frozen at the rate you get at time of emigration (to australia, NZ, Canada and several others). You can claim the UPP on this each year at the rate of 8%, rather than going through the long and probably abortive procedure of getting your contribution figures from the UK government.

A (non-government employee) private pension can also have a UPP tax allowance, but you cannot use the blanket 8%: you have to get your employer to provide all your contributions and then get a ruling from the ATO, who will send a letter showing the calculations and what you can claim in pounds sterling. In my case for example it is £2261 each year (which must be converted to AU$ at the ATO's average exchange rate for the financial year). Follow me so far:fingerscrossed:? Also, the letter will say that this figure is unchanged for all following years.

I personally have found the ATO helpline people very helpful, although many of them have accents difficult to follow especially as they speak very quickly and use terms familiar to them but obviously not to you.

If your income/allowances affairs are not overly complicated the ATO ETax I have found in the past very good: it takes you through the return by asking questions and at the end supplies you with a tax estimate, after which you just click "lodge" and it's sent off to the ATO. Unfortunately my experience *this* year was less happy: the politicians have altered several things which make the tax even more complicated and in addition you have to register with the government portal to be able to use the online ETax - and th registration took me two days because it wouldn't accept my email address (which isn't the usual xxxx.com or xxxx.net etc.) And it kept saying it wasn't available, possibly because too many people were online together.

WRT having your pensions paid clear of UK tax, download the form from the ATO, fill it in and post to the ATO: they verify your status in Oz and send it to the UK tax office, who will arrange for your UK tax status to be closed.

Hope this helps?

Re: UK Private Pension in Oz
 

Hi Wol, Thanks for your reply. I did speak to Centrica about my private pension & UPPs Both Centrica & HMRC had never heard of UPP! You say a private pension can also have a UPP? Since I commenced work at BG in 1979 and finished in 2000-I presume this means I would have to ask BG to provide all my contributions for those 21 years?

Re: UK Private Pension in Oz
 

Yes, I'm afraid that's the case. Their pensions people will (should) have all the data for all the period you worked there including all their different entities.

There's also a further complication relating to private pensions: if you were "contracted out" with or without your consent or knowledge, part of the private pension may be subject to the same freeze as the state pension from the time of emigration (to the same countries as before mentioned.) The way the proportion is calculated (by your pension office) is esoteric and could only be dreamed up by politicians/civil servants/psychopaths. IIRC part of the freeze depends on the pre-1988 calculated pension and part afterwards. The net result in my case is that, although my company pension is indexed, the indexation applied to my own case is slightly less each year than the official rate and this, coupled with the fact that my company - bless 'em - have chosen to go along with the UK government's use of CPI instead of the RPI we were contracted to, means that my pension's shortfall gets compounded every year by a small but eventually significant amount. You may or may not find the same thing applied - it seems to be almost arbitrary.

Re: UK Private Pension in Oz
 

Are you sure?
I don't understand this:confused:

My government (NHS) pension is not taxed in the UK and is paid gross here....I pay no tax in the UK and arranged this when I came here. Neither is my wife's civil service pension.

Re: UK Private Pension in Oz
 

Me neither.

Re: UK Private Pension in Oz
 

Hi Wol & Grayling, Thanks for your replies-As far as I can see you can claim UPP (8%) only on a UK State Pension, per ATO website-not on a private pension such as BG. It's all very confusing!

Re: UK Private Pension in Oz
 

Having checked the HMRC website :

The rules are different for persons living in Australia, Canada, New Zealand and Cyprus.....you can claim exemption from UK tax on Government Occupational pensions if you move to any of Those countries.

Re: UK Private Pension in Oz
 

Wol a very good summary of things by you :-)

Re: UK Private Pension in Oz
 

Correct - but only as regards the 8% blanket arrangement: as I said above, you have to provide the contributions figures for the private pension and the UPP is calculated for that based on those figures.

There's a special place reserved in hell for all those who over the years have f****d up the pensions systems in every country.

Re: UK Private Pension in Oz
 

I reckon about 90% of the population would qualify as a 'simple soul' when it comes to Oz tax time, including me :lol:

I'm fine with just completing an ordinary PAYE tax return, it's when your tax affairs aren't straightforward that the rot sets in, in my brain anyway!

Scouse and I will be retiring in Liverpool and although we're going to get financial and tax advice, I've tried to get my head around the basics of receiving our Oz superannuation allocated pensions in the UK. With very little success :unsure: The more I read, the more I realise that my brain is just not wired to understand complex tax/financial stuff.

Wishing you the best of luck!

Re: UK Private Pension in Oz
 

Hi Wol, Grayling, John in Oz, BG Pensions will send me a confirmation of my pension contributions but, only from 1989-2000-they cannot trace previous 10 years! I suppose 11 years is better than nothing. Thanks-Wol for clarifying that point.
Spouse of Scouse-My brains not wired-fullstop. Anyway, I hope everything works out in the UK for you.

Re: UK Private Pension in Oz
 

There is some info on Oz super in my partner forum on this site if that helps if not just PM and I will help you out with the info you need. Cheers

Re: UK Private Pension in Oz
 

Thanks John, much obliged :thumbup:

Re: UK Private Pension in Oz
 

[QUOTE=Wol;11330705]First the caveat emptor! We all try and help, but individuals' circumstances vary so always double check our replies!

I was not aware of the bit about government employees' pensions being treated differently, so what follows is only my own experience.

The state pension is frozen at the rate you get at time of emigration (to australia, NZ, Canada and several others). You can claim the UPP on this each year at the rate of 8%, rather than going through the long and probably abortive procedure of getting your contribution figures from the UK government.

A (non-government employee) private pension can also have a UPP tax allowance, but you cannot use the blanket 8%: you have to get your employer to provide all your contributions and then get a ruling from the ATO, who will send a letter showing the calculations and what you can claim in pounds sterling. In my case for example it is £2261 each year (which must be converted to AU$ at the ATO's average exchange rate for the financial year). Follow me so far:fingerscrossed:? Also, the letter will say that this figure is unchanged for all following years.

Hi
For me it was worthwhile getting my NI history as the UPP worked out at more than 8%. Also I have claimed the UPP for my UK pensions for some time without any ATO involvement needed. (have full records of contributions)

Cheers

Re: UK Private Pension in Oz
 

Got a pleasant surprise this week, HM Tax office refunded my tax paid on my private pension in full, I thought I would have to submit a tax return to get the refund but seems not. I'm now receiving my UK company pension without any UK tax deducted
Only down side is they sent me a cheque in Sterling which I've paid into my Oz $ account but takes about 1 month to clear.

Re: UK Private Pension in Oz
 

Hi, My wife, still working in Oz, is now receiving pension payments from the NHS once per month. I am trying to find out her pension contributions from NHS, to claim UPP. The following is info. I received from her local NHS Trust: "The pension contributions from your wage/salary are deducted before the tax is calculated. When you draw your pension it is based on your pensionable service and final 365 days pay and not the actual contributions you paid in. Your pension is calculated by the NHS Pensions Agency and passed onto to Equiniti Paymaster. We think tax is based on your pensionable income rather than what you contributed at the time". Can anyone comment on these remarks, if correct, how can my wife claim UPP?

Re: UK Private Pension in Oz
 

Yes! They have obviously not understood the request, which is probably nor surprising since UPP is an Australian thing. You will either have to persist in asking - which may not get anywhere, for the same reason, or use the 8% alternative, which is actually easier.

You just put down 8% of the pension for the year, in Oz$, in the tax return. You can IIRC use the ATO's annual average or the daily exchange rate figure.

Since our state pensions are delivered directly to our bank here, incurring exchange costs, I asked the ATO if these could be rebated and the agent said they would be quite happy if I just used the amount in dollars that went into the account, for simplicity all round.

Re: UK Private Pension in Oz
 

Hi Wol, Thanks for your comments. I've just spoken to NHS in Fleetwood and they will send my wife a breakdown of her contributions from 1990 onwards. I understand that the 8% rule is only for state pensions, not NHS? So, once I receive the information I'll send the info to the ATO and request a ruling on UPP. Clive

Re: UK Private Pension in Oz
 

Yes, the 8% is only for the state pension - I misunderstood!

The ATO ruling only takes a week or two.

Re: UK Private Pension in Oz
 

Hi Wol, Thanks for that clarification. I'm awaiting a ruling from the ATO about my NG pension!

Re: UK Private Pension in Oz
 

Hi Wol, Sorry to be dumb. regarding the State Pension deduction of 8%. If I received an amount say, of $4200.00 AUD, I then deduct 8% and pay tax on the balance?

Re: UK Private Pension in Oz
 

Not quite that simple, there are other deductions and concessions that might be applicable. But on the tax return yes, you do enter under the "UPP" amount, $336 (on the figures you mention.)

Re: UK Private Pension in Oz
 

Hi Wol, Many thanks-I did contact the ATO and I was advised foreign income calcs are a "minefield" another ATO worker also told me just write in the figs and, if, in the future you are audited, as long as you can show your calcs-there is nothing to worry about!

Re: UK Private Pension in Oz
 

Yes concur with final comment - keep you calculations for the required period for any tax lodgement because if audited they want to see how you came up with that figure. If doing a UK Pension Transfer the same applies when declaring tax (if applicable) you need to explain how you came up with the figures so keep those records. This will save you a lot of heartache.. :-)

Re: UK Private Pension in Oz
 

A minefield indeed!

The ATO does seem quite practical in some ways, and the UPP is one of those ways in my experience.

Although the agent I spoke to (and this was some ten years ago) talked informally - so I haven't got an "official" ruling - he just said that for practical purposes with regard to a pension being remitted from abroad, using the AUD$ amount you receive would be acceptable. Otherwise you would have to calculate what expenses you incurred in each credit, which is probably impossible.