UK Tax on Australian Superannuation

Hi I have a clients who are 29 and 33. They returned from Australia 2 years ago both with a Superannuation in Australia. Due to their 417 Visa they would be taxed at 65% if they transfer the funds to the UK. Would these funds need to be transferred to a pension or is it paid as cash? Also, to avoid the large taxation, could they leave the supers there until retirement, I believe age 60? And take it as income? What would be the taxation of the supers at this point? As a lump sum or as income? Thanks

Hi JJMurph,

Superannuations are treated as pension income. If you are a UK tax resident then this will need to be reported through a Self Assessment tax return. You can also show the tax paid on this and we then give foreign tax credit releif so that you are not taxed twice on the same income. 

Thank you.

Hi R C,

Suparannuations are classed as pensions for UK purposes and would therefore be taxed as such.

If the tax amount of 65% is based on a visa then you may wish to speak to the home office regarding this.

In terms of how the funds are paid you would need to speak to the fund holders.

Our pension scheme services also deal with pension administrations so they  may be able to help further:
Pension schemes 

Thank you.

During employment Australian superannuation contributions are taxed prior to going into a specific fund. Percentage draw down monthly amounts specified by the government are mandatory after reaching a certain age. My question is as the initial contributions amounts inserted into the superannuation fund are already taxed by the ATO, and if a UK resident --does the UK tax apply to the full amount drawn down each month ; or --does the UK tax only apply to the investment amounts the fund makes ? thank you

 Hello,

The full monthly drawdown amount of the pension is taxable under UK rules. Thankyou

As an Australian citizen and retiree over 65 I receive a government pension and a super income stream both of which I'm not required to pay tax in Australia. I have family (son (Australian) permanently working in Holland and my daughter in law / (Dutch citizen) and their grandson born there last year) residing permanently in the Netherlands with Dutch citizenship, I would like to visit once the restrictions ease. I usually roam around UK whilst visiting them as I love the UK. I wonder if I move to the UK as a retiree to be closer and more available to them to help out, would I pay UK tax on both my government pension and super income stream over there.

Hi,

As a UK resident you would be entitiled to pay income tax in the UK.

A guide to UK and Australia tax treaty agreement and tax on foreign income see link below for more information:

Australia: tax treaties
   
Tax on foreign income Skip to contents of guide Contents

Thank you.
 

Thank you everyone, I have read that with great interest. I am waiting for a response from my accountant but alternative views would be greatly appreciated! I am UK resident and de-facto spouse of a deceased UK & Australian Citizen (she was here for 10+ years) and will be paid out as the sole beneficiary of a superannuation via the Estate. Should this be taxable in Australia? I have no citizenship there and as a spouse it wouldn't normally be taxed. Within the UK normally a (legal) spouse would not be taxed, but we don't have 'de-facto' and as such will HMRC recognise it and allow the income back into the UK not to be taxed? Or will I need to process it through my self-assessment simply as income? As I said, thoughts would be greatly appreciated as this is not a very common scenario.

I have dual Nationality Australian and British, Do I understand correctly from the above that if I draw from my super fund in Australia but do not remit the proceeds back to the UK (just leave in an Australian Bank Account) it does not form part of my taxable income?

Hi,
 

If you are deemed domiciled in the UK you will need to report your worldwide income to the UK.  See link below: Tax on foreign income . Thank you.

Hi
 

Simon Kerry,   You will report your overseas pension on the foreign section of your Self Assessment tax return. Thank you.

 

My husband is an Australian citizen. I had permanent residency. We returned to the UK seven years ago after 17 years in Australia. We have a large pension fund over there. I understand from this thread that if we take this as a monthly pension we will be taxed in the UK on the amount. But I'm not clear about the tax implications if we take it as a lump sum. Also, is it possible to transfer the fund to a UK fund? Thanks.

Hi, 

Please see the tax treaty article 17 and 18: 

UK/Australia Double Taxation Convention 

In terms of the transfer of a fund, this would need to be referred to our pension scheme services team: 

Pension schemes

If you need further clarification on the treaty itself then please contact us for further guidance:

Self Assessment: general enquiries

Thank you. 
 

Can you please clarify. We have returned to the UK and will become permanent residents for UK tax purposes. We each receive a pension remitted monthly from our Australian Super Funds. Is this simply regarded as Foreign Income (pension) for the Self Assessment Form? Does the Super Fund Have to comply with any UK tax requirements? Is there an online tax tool you can refer me to calculate tax on the income?

i have a pension fund in Australia which I do not draw. Payments are received into the fund by way of dividends/income distribution, which are taxed within the fund at 15% am I abe to offset these deductions against my UK tax through the reciprocal arrangement with Australia?

Hi,

If you report these dividends to the UK then you can claim FCTR against any UK liability by advising us that of the amount of tax paid in Australia. This would need to be done through self assessment on the foreign section.

Thank you.

 

Hi Katz57,

Yes, this should be treated as a foreign pension and would be entered under the foreign section of the return.

If any tax has already been deducted in Australia then also enter this information as you may be able to claim credit for this against any UK tax.

Thank you.

If this is the reply below to my query of the same date, they are not dividends they are income distributions same as made on trust funds in the uK Your reply Hi, If you report these dividends to the UK then you can claim FCTR against any UK liability by advising us that of the amount of tax paid in Australia. This would need to be done through self assessment on the foreign section. Thank you.

Hi,

It may be best to call us to dicuss further as to whether these are income distributions or dividends. See link below:

Self Assessment: general enquiries

Thank you.

 

I am a dual Australian/British National. When I retire at 60 I wish to spend time in my UK house. The majority of the year I will reside and be domiciled in Australia. Can you advise how long I can reside in the UK each year before being liable for UK tax, if my principle place of residence and country or domicile is Australia ?