UK Tax on Australian Super?
 

Hi all,

I'm currently living and working in Australia but planning to retire back in the UK. I have dual citizenship but am originally from the UK.
I have a query about dual taxation that I hope someone on here may have experience of. I know there is no avoiding tax altogether but that the tax treaties are there to prevent you from paying tax twice.

As I understand it, in the UK you get tax relief on money in your private pension fund (Superannuation fund) and can get a tax free amount of up to 25% when you retire. You are then taxed on the remaining 75% taken as income when you retire.

In Australia, you pay tax on your super earnings while it is in your fund but can withdraw your Superannuation fund as a tax free lump sum or take a tax free income when you retire.

This is a very simplified interpretation but my query is, if I were to start a tax free income stream paid into a bank account in Australia then later retire in the UK, would this continue to be tax free if transferred from my Australian bank account to my UK account? I read an article in the Sydney Morning Herald article that said this was "theoretically" the case as it would be treated as savings, but it's the word "theoretically" that worries me :-)

I can't post the link here but if you search for "How to live off Australian retirement savings in the UK" you should be able to find it.

I have tried to find the information on the HMRC website but find it impossible to fully understand.

Does anyone have any experience of doing this?

Thanks!

Re: UK Tax on Australian Super?
 

When you become tax resident in the UK, you are taxed on your worldwide income. Your super income stream is taxable as foreign income.

The way we got around this when we returned to the UK was to withdraw our super whilst still Australian residents, at which point it becomes your personal capital, then transferred it back to the UK when we returned.

Here is a guide to HMRC's treatment of foreign pensions: https://www.gov.uk/hmrc-internal-man...anual/eim75500

Also search on here for "'foreign pension'" . There are endless queries about it, some of which are helpful: https://community.hmrc.gov.uk/customerforums/

Depending on the timing of your return, you may want to apply for split year treatment: https://www.gov.uk/hmrc-internal-man...asis/rdrm12000

Re: UK Tax on Australian Super?
 

That sounds like the approach I would take.

Re: UK Tax on Australian Super?
 

Exactly what I did. Withdrew the super so it became savings, then transferred it all to the UK just before I left Aus.

Re: UK Tax on Australian Super?
 

Thanks everyone for your replies and information. I think withdrawing it all will probably be the best and easiest way to go.

Re: UK Tax on Australian Super?
 

Hi. I'm also long term Australian citizen, retiring back to UK. I have advice from a UK & Australian Tax Accountant, conversant with tax regulations in both countries. I'm advised that a UK tax resident will pay UK Income Tax on foreign pension income received, and lump sums, effective from 6 April 2017, when rules re tax on overseas pensions changed.
It's complicated because of continuing changes to tax rules. Best to get advice.
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I'm recommended to withdraw all Super funds whilst Aus resident,then reinvest in UK. (A challenge among many, to repatriate to UK).
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