UK Tax on Australian Superannuation

Hello HMRC Admin 10, Thankyou for the responses. I do not understand your first response above - An Australian fund is unable to give advice regarding what HMRC might deem taxable, so could you explain a bit more regarding what you mean please ? Thanks Bill

Hello, Which parts of your website should I read to better understand whether or not HMRC might tax a UK resident the growth on my Australian Superannuation if I leave it in Australia and do not take a pension ? Thanks Bill

Hello, Which parts of your website should I read to better understand if HMRC would regard a profit caused by exchange rate fluctuations to be taxable to a UK resident who has an Australian SUper fund ? Thanks Bill

My previous hypothetical questions involving fictional situations were regarded as financial planning questions. Could you please put up some guidelines regarding what you mean by financial planning so that I do not ask any further financial planning questions. I am keen to better understand how HMRC treats our superannuation if we leave it in Australia. Does HMRC have any worked examples anywhere on the website, it can be a bit difficult for a layman to wade through some of the documentation and worked examples would be very helpful.

Hi,

Please see the following guidance on Tax on Foreign income:

Tax on foreign income

Thank you.
 

Hi,

HMRC does not give advice on planning for the future as the tax rules can change at any time.

Under the current Australia /UK double taxation agreement, article 17, Pensions paid to a resident of the UK from Australia shall be taxable only in the UK. 

UK/ AUSTRALIA DOUBLE TAXATION CONVENTION

Thank you.

Hi,

Financial planning is looking at ways to reduce your tax liability which HMRC does not get involved in.

HMRC may tax a UK resident's world wide income.

As mentioned previously if you take your Australian pension then under article 17 of the double taxation agreement the UK can tax this. If the pension you take is classed as a Trivial Commutation Lump Sum then Australia have the right to tax it and it will not be taxed in the UK.

Thank you.

Hi Bill, you are only liable to be taxed on money once you withdraw it from the super fund at which time HMRC tax it as income.

Hi all I lived in Australia for 5 year becoming a permanent resident. My question is has anyone or does anyone know if I can transfer my superannuation to my uk pension I have been out of Australia for 7 years and my PR has now expired Thank you

Hi,
 

You may wish to speak to our Pension schene services reagrding this. They can be contacted here: Pension schemes    .

Thank you.

Hi Tom-M

A lump sum is not legally defined and is therefore a matter of interpretation.

A lump sum should be a payment that is not a periodic payment. 

This may not empty the pot, and a taxpayer may have more than one lump sum payment. 

Example – If a taxpayer receives monthly pension payments and then takes out a larger payment as a one off from the same pension pot, whilst continuing with regular monthly pension payments, then this one-off larger payment can be considered a lump sum as it is not a regular periodic payment.

However, if a taxpayer has a pension fund which only requires an annual distribution of a certain percentage (eg 4% payment annually)to be made, then even though this is only once a year, it should be considered a pension as it is their periodic pension.

Thankyou.

Regards.
 

Being a UK expat living in Australia for the last 30 years, thinking about retiring in UK in a couple of years once I turn 60 looking at a scenario of having $1,000,000 in a Superannuation income stream account which is tax free in Australia and withdrawing 5%pa of total back to UK each year( approx GBP 25,000pa) ,what tax if any would I be looking at paying in the UK per year?

Hello HMRC I will be returning to the UK having lived in Australia for 15 years (now an Australian citizen). I have closed my Superannuation account and transferred the lump sum amount to my Australian bank account. This was tax free as I am 60 years old. On return to the UK I will transfer the money from my Australian bank account to a UK bank account to buy a house, car etc and to use the remainder as living expenses as I am not yet of pension age i.e.67 years old. Would I have any UK tax liability on the money I transfer?

Hi
 

Tony Simpson,

We are unable to provide financial planning advice or give advice on hypothetical situations. However, as a UK tax resident you would be expected to report your worldwide income to the UK, including pensions unless there is a specific clause in the tax treaty to state otherwise. Australian pensions are generably taxable in the UK. See Link: UK/ AUSTRALIA DOUBLE TAXATION CONVENTION  . This is not dependant on whether the money is brought to the UK. Thank you.

Hi,

If the lump sum has been paid during a period of non residence then this would not need to be reported for income tax purposes to the UK. 

Thank you

Hi HMRC, I am seeking a slight clarification on HMRC Admin 17’s reply . I assume the statement “This is not dependant on whether the money is brought to the UK.” is designed to apply specifically to Tony Simpson, who a a “UK expat” would presumably be UK domiciled/deemed domiciled and could not claim the remittance basis of taxation. I assume that it still correct that someone not UK domiciled or deemed UK domiciled can avail themselves of the remittance basis and that if they have Australian superannuation assets but do not remit anything from these assets to the UK there will be no UK tax on the superannuation. Are my assumptions correct? Kind regards

This income stream is not an Australian Government Pension. I believe it is somewhat similar to a UK workplace pension, however the scheme is taxed on any amounts going into the superannuation and on any capital gains and is therefore tax free once you reach 60 and have retired from the workforce. One can then receive a monthly income stream tax free or receive a lump sum or withdraw the whole amount, all tax free while residing in Australia. Surely if the UK taxed this again it would be double taxation?Also would this capital amount of superannuation be subject to UK inheritance tax if I resided in the UK?

Hi Michael Abbott,

Please see guidance on the remittance basis here:

Residence, domicile and the remittance basis: RDR1

If this is being claimed then income does not need to be reported unless it is remitted to the UK.

Thank you.

Hi Tony Simpson,

You can find further guidance regarding these superannuation funds here:

DT2654A - Double Taxation Relief Manual: Guidance by country: Australia: Notes

You may also wish to contact our pension schemes team for advice.

Pension schemes

Thank you.

 

Hi HMRC I have read many of the comments and subsequent replies regarding tax on Australian Super for UK expats having returned from Australia now redommiliced in the UK, therefore subject to UK income tax on all global assets. However, i am still a little confused re the difference beween payments via superannuation income stream, that being regular monthly payments made to the individual tax free (if aged 60 or more) in Australia, and lump sum payments. As i read the comments, monthly income payments via income stream is taxable in the UK ONLY IF the money is brought into the UK. Please confirm this understanding. With regards Australian superannuation lump sum payments, if taken, are these lump sums also to be taxed in the UK as "income" or are lump sums excempt? Additionally, given that at the age of 55 years an individual residing in the UK is able to withdraw 25% of a UK pension tax free, do the same rules apply to Australian Super, drawn as a lump sum by an individual aged over 55 years, now residing in the UK?