goslar1961

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?

Wol

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.

goslar1961

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

Wol

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

The ATO ruling only takes a week or two.

goslar1961

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

goslar1961

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?

Wol

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.)

goslar1961

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!

john 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.. :-)

Wol

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.

goslar1961

Hi John & Wol, Thanks for both replies-I've worked out the figs for both State & Private pension deductions-so fingers crossed they should be ok. The ATO did advise me in writing they had agreed to allow me an UPP amount on my private pension, took about 4 to 5 weeks to sort out altogether. Once my wife receives her NHS payment history, I can apply for an UPP, at least I know the process etc. Thanks again for your replies.

Wol

A pleasure: that's what we're here for

john in oz

Happy to help anytime :-)