Tax treaty with Australia - Interest in bank accounts

I am a UK tax resident, recently moved here from Australia. I have money sitting in a bank account in Australia for which I earn interest on. Under the tax treaty I pay the Australian Tax Office 10% tax on this interest. My question is, do I need to pay further tax in the UK on this interest? ie that would be 20% over £1000 total interest (between here and Australia) if I am in the 20% tax bracket (so I would pay an extra 10% to get a total of 20%) or 40% interest total if I have over £500 interest (I would pay an extra 30% to get the 40% total).

Hi
Yes you would need to pay 20% in the UK on this income so you would have an additional 10 % to pay here as you can claim relief for the 10% already paid in Australia.

And if I am in the 40% tax bracket, do I need to pay 40% or does it max out at 20%?

Hi LouiseHHHH Harwood,

You pay tax on any interest over your allowance at your usual rate of Income Tax.
So if you are in the 40% tax bracket, you would pay 40% on the relevant amount of interest, and claim Foreign Tax Credit Relief re: the Australian tax
(10% being the treaty rate) already deducted.                
Tax on savings interest

Thank you.

Hello, I am an additional tax rate payer living in the UK. If I earn interest on a savings account in Australia, for example, $AUD 10,000 per year, the Australian government apply a "foreign with-holding tax" amount of 10%, so $AUD1000. I therefore receive $AUD9,000 net interest. When I complete my UK taxes, should i simply say that I've earned equivalent of $AUD9,000 of foreign interest, or should i put $AUD10,000 and then claim a foreign tax credit amount of $AUD1,000? Many thanks.

Hi,

In the foreign section, you should declare $10000, as that is the interest received and claim a credit for $1000, as that is the tax paid. In this way, $10000 is included in the SA calculatation and up to $1000 credited as tax already paid.

Thank you.