UK Tax on Australian Superannuation

It seems there are an awful lot of people on here that are affected by what seems a double taxation on Australian pensions. As an Australian citizen and past resident, I was encouraged to put some of my already taxed savings into my superannuation fund. As this was already taxed on the way in , I was able to draw the entire fund tax free at pension age . Having returned to the uk (after four years) as a permanent resident now find that withdrawals are taxable even though all of the fund was made up from savings accumulated in the uk from taxed income . So as an instance say I earned when I was originally uk resident £2000 one month, after tax say £1600 of which I saved £800 in the uk . When I moved to Australia I put that £800 (of which I had already paid £200 in uk tax) Into my super fund. But having returned to uk and wish to draw it I will have to pay a further £160 in income tax (£800 x 20%) so my original £1000 earned is now only worth £640 having paid £360 in tax. This is totaly unfair and will affect many pensioners who have superannuation funds in Australia, taxing them twice which is unjust. Who can we all write to and lobby to have this ruling investigated and changed?

I refer to the info below https://www.gov.uk/government/publications/pension-tax-for-overseas-pensions/pension-tax-for-overseas-pensions I have read the section in relation to lump sum withdrawals per below. If the scheme is an overseas pension scheme (which has a specific meaning as set out in PTM112200) part or all of the lump sum may be paid tax free. If the lump sum is the equivalent of one of the authorised lump sums paid under a registered pension scheme it should receive the same tax treatment. For example, for the equivalent of an uncrystallised funds pension lump sum paid to a member aged under 75 (see PTM063300), 25% will be tax free and 75% will taxable as pension income. I have a plan in accumulation with “Australian Superannuation” which is a large superannuation fund in Australia. It is open to the public to join. Please can you confirm or assist in explaining any guidance regarding if lump sum withdrawals are taxed in UK on the basis of 25% tax free 75% taxable. I am uk tax resident. Many thanks in advance

Hi Daiput,

As this is a matter of legislation you would need to take the matter up with your MP.

Thank you.

Could agree with you more Daiput Not only that if, one went in the other direction and transferred a uk pension into a qrops in Australia, I understand it can be withdrawn free of Uk tax after 5 years. A totally ludicrous situation compared to ours! I’m not sure that the rules were purposely set out to penalise our situation in such a way and I wonder if it makes sense to write to a MP. I wonder also if HMRC are interpreting the rules correctly ?

I am a UK citizen shortly able to access my Australian superannuation (around £100k). Am I correct in saying that if I take this in regular pension payments that they will be taxable in the UK provided they exceed my personal allowance? If I took the superannuation as a lump sum would it be taxed in the UK and if so would the first 25% be tax free? If so could I take the 25% tax free and then take the rest and pay UK tax at the appropriate level to my annual income?

Hi,

The pension is fully taxable in the UK. How you wish to withdraw the pension is up to you but you may wish to discuss with a financial adviser.

Thank you.

I am Australian by birth (1963) and have been living and working in the UK since 1996 (dual nationality from 2006). I had worked in Australia for approx 16 yrs before coming to the UK and my super funds were rolled over. My super fund is now worth approx £100K and as I meet the ATO requirements, I am looking to close this account and have the lump sum funds wired to the UK (no ATO tax would be due because it is under AUD$250K). I have a UK pension plan worth approx £270K. I've been told that it is not possible to transfer the super fund direct to my UK pension (shame!). Instead, I believe that once the super funds arrive in my bank account, I could complete a lump sum deposit to my UK pension plan. However, I need to understand whether there are any tax implications with HMRC with the Australian super amount and if so, what the calculations would be. If it is possible to deposit the super lump sum, then I plan on purchasing an annuity which will be taxable by HMRC. (if the super lump sum is taxable, then this could me that a portion of this money would be taxed again in the annuity). I've not been able to find any information that can explain the tax implications and how to process these transactions. Nor have I had much luck with securing the services of a financial advisor to assist me. I would be grateful if you could provide guidance and/or advice on how best to proceed or where to locate the information needed. Would it be best to secure the services of a tax accountant rather than a financial advisor? Thank you.

Hi Ann,
Under article 17 of the Uk / Australia tax treaty, a lump sum from an Australian pension paid to a UK resdient will only be taxable in the UK.
The lump sum should be declared in a Self Assessment tax return.
2003 Australia-UK Double Taxation Convention - in force
You should claim a tax refund of any tax paid in Australia.
Thank you. 

Hi there, can you advise what the QROPS reference number is for the Australian QROPS The Tidswell Master Superannuation Plan?

Hi,

Please refer to below or contact the pension company direct.

Check the recognised overseas pension schemes notification list

Thank you.

Hi there, I have an elderly relative, who’s resident for tax purposes in the UK. They receive a small UK teacher’s pension, along with part-time employed income in the UK. ( They've been living in the UK for the past 20 years). They have a frozen Australian teacher’s pension where no benefits have been taken to date. They’re allowed to take a sizable lump sum from their pension pot, and are looking to move a lump sum over to the UK for a variety of investment reasons. What would be the tax liability on the transfer to the UK from an HMRC prospective? We’re assuming there’d be a tax liability from the Australian side.

Hi,
Please refer to guidance at:
Tax on foreign income
Thank you.

Hi there, I am a British Australian living in the UK now. I have a Australian Government Super Annuation fund. Please can you clarify as the tax documents provided aren't very clear. 1) If I take it as a monthly pension paid into my Australian bank account, then transferred to the UK, will I pay tax in the UK, via an annual tax return? 2) If I draw down on it once a year as a lump sum, have it paid into my Australian bank then transfer to the UK, will I need to pay tax on it via an annual tax return? 3) As I understand it I will not pay tax on my pension in Australia under $350000. Does that mean that I will still have to pay tax in the UK? Thank you.

I am resident in the uk for tax purposes , but hold Australian dual nationality. I have my superannuation fund in Australia , I pay tax at 15% on all income I receive within the fund to the Australian Tax Office. Am I able to offset that tax paid against my UK tax liability, as income/growth within a pension fund is not subject to tax in the UK

Hi
No as you have not actually taken a withdrawal/income from the fund.

Hi
As resident in the UK you are liable on your worldwide income so the pension would need to be declared here -Tax on foreign income

I have recently returned to live in the UK permanently from Australia (was a permanent resident). I want to withdraw my total superannuation as a lump sum in June 2025 when i reach preservation age (60) and transfer to the UK. Will i be taxed on the lump sum in the UK and/or Australia.

Hi ,
 

It will be UK . Thank you .

I am UK tax resident and have received a lump sum that represents full payment of my Australian pension on reaching retirement age (built up when I lived in Australia 15 years ago). I have not had Australian tax deducted on this recent receipt. Can you tell me (i) whether I need to disclose this receipt on my UK tax return (ii) what the UK tax treatment of this receipt is and (iii) how i can contact HMRC to discuss this if needed.

Hi,
The tax treaty between the UK and Australia advises in article 17, that your Australian pension is taxable only in the UK.  
Australia: tax treaties
You will need to declare the pension in a Self Assessment tax return in the foreign section or SA106 if the return is submitted on paper.
Thank you.