UK Tax on Australian Superannuation

Dear HMRC Admin 17 Thank you for your reply and suggestion that I check out the information at the 'Foreign pension schemes' weblink. I have carefully read and re-read the information contained there, unfortunately I am still unsure re my question regarding UK tax treatment of my withdrawal of a lump sum from my Australian fund, especially my specific question regarding: I can withdraw 25% of my total Australian super (including 'Sum X') as a lump sum tax-free in the UK? or: I can only withdraw 25% of the 'Sum X' as a lump sum tax-free in the UK? Please can you reconsider my question and give me a clearer, more concise answer? I really appreciate your help.

Hi Pritesh Kabawala,

You will need to contact the pension provider to ascertain if the savings can be withdrawn as a one-off payment.

If taken, you may be liable to tax in both countries but you can claim foreign tax credit relief for the Austrlian tax if you are tax resident in the UK. You can see guidance here:

Tax on foreign income

Thank you.

Dear HMRC I have savings in an Australian superannuation fund, to which I have not contributed since March 2016, when I returned to be resident in the UK. I was at that time advised that the fund was a Qualifying Recognised Overseas Pension Scheme (QROPS) under UK law. Please can you tell me: 1. How can I find out if my fund is still a QROPs or not? 2. If it is no longer a QROPs, will any lump sum I extract from it and transfer to the UK be liable to UK tax or not? Thanks for your help.

Hi Nigel Hardiman,

Please see guidance on QROPS and also the double taxation treaty with the UK and Australia (Article 17)

UK/ AUSTRALIA DOUBLE TAXATION CONVENTION

Check the recognised overseas pension schemes notification list

Thank you.

Hi, UK citizen moved to Australia. fund value of UK personal pension transferred to Australian Personal Super fund. individual returned to UK 2017. August 2019 full value of Super fund paid out as lump sum. Taking into account individual UK resident when lump sum drawn please can you state UK tax status of lump sum received. Thanks, AMD

By way of extra info. individual in earlier post moved to Australia 2007 and residency granted 2010 UK personal pension fund value transferred to Australian Super Fund circa 2010 thanks, AMD

Hi,

As a UK tax resident, you will need to declare the pension in the UK.

Thank you.

I have read these posts and have to say I am more confused than when I started. I am a dual British and Australian citizen (currently domiciled in the UK). I am now in my mid 50's but in my late 30's/ to mid 40's I accumulated a modest Australian super which is still active. I believe that I can access the whole of this super at age 60 if no longer working, or 65 if still working. My question is pretty similar to everyone else's. If the Australian Super fund pay the full lump at 60 into my UK bank account, is it liable to UK income tax? Also, if I have the same lump paid first into my Australian bank account does it then become savings and is it therefore exempt from UK income tax should I later transfer some or all of it to the UK? And finally, am I able, now, to pay cash from my UK savings into my Australian super, and would these contributions have to be accounted for differently by HMRC when I withdrew the super? Thanks to anyone/HMRC Admin who can clarify.

The section on pensions is rather opaque. Its states: ARTICLE 17 Pensions and annuities 1 Pensions (including government pensions) and annuities paid to a resident of a Contracting State shall be taxable only in that State. 2 The term “annuity” means a stated sum payable periodically to an individual at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money’s worth. Does 1 mean that I would need to be a resident of Australia at the time the lump sum was paid to me to avoid UK income tax. Ie: Given that am residing in the UK, If the super company pays me the full lump of my Australian superannuation into my Australian bank account when I am 60, and I then transferred that money to the UK, it would then become liable to UK income tax?

I emigrated to Australia in 2006 but moved back to the uk in 2010. Whilst in Australia I paid several sums into a superfund from monies which had been accumulated from my uk savings which had previously been taxed under my general earned income. If I withdraw these monies now from my Australian pension fund , my understanding is that they would be classed as taxable income whereas I am only withdrawing money which I had saved whilst in the uk and had paid tax on from my income. Surely this is not right and is double taxing my income? If I had left the Money in the uk in a savings account anD had withdrawn it I would not have been taxed on it, similarly if I had just transferred it from the uk to an Australian bank savings account I would not be taxed on it so please explain why cashing in money in a superfund is any different

Hi Daiput
If the money had been left in a savings account it would still be lible to tax on interest generated (above £1000). as it was your choice to invest in a pension, this is then generating a further source of taxable income which needs to be taxed irrespective of how the pension was funded.
If your total annual income is below your personal allowances for the tax year, then this will be paid tax free.
Thankyou.
Regards.

Hi Melbourne Departed,

Once you take the pension, it is liable to UK tax whether paid into a UK or Australian bank account..

You would need to check with the actual pension company regarding additional payments you make. 

Tax on foreign income

Thank you.

https://community.hmrc.gov.uk/public/c0225cb5-410d-ea11-a811-000d3a7ed2f2/forum-posts In reply to admin 10 above , are you therefore saying if I was to withdraw the initial capital input into the pension fund , but leave any capital growth in the fund, there would be no tax payable on the original capital investment as long as id not touch any growth element

Hi Melbourne Departed
That is correct.
If tax resident in Australia at the time the pension was paid, it would not come under double taxation rules.
As a UK tax resident, you are liable to pay tax on it whether it is in an Australian or UK bank account.
Thankyou.
Regards.

Hi Daiput,

We are unable to provide financial advice.

Thank you.

HMRC Admin 19 I am not asking for financial advice I am asking a question on a tax related matter solely

I am in a similar position to many who have posted on this thread. I have an Australian Superannuation fund which I contributed to during a 4-year period working in Australia. All of the funds in it were either contributed tax paid or are gains which are also tax paid in Australia. I am now back in the UK and looking to access the fund. Australian rules allow me to remove to total fund in a single lump sum (subject to some limits which I will not hit), which is not subject to further (Australian) tax as the fund is already tax paid. I wish to extract the value of the fund as a single lump sum and transfer to the UK. The question is whether the UK government will look to tax this lump sum. There seem to be different answers given by the HMRC Admins in this thread in response to this question (HMRC Admin 2 in a post 2 years ago stated "Where a lump sum payment is taken out this would be taxable only in Australia."; HMRC Admin 19 in a post 4 months ago stated "If taken, you may be liable to tax in both countries but you can claim foreign tax credit relief for the Austrlian tax if you are tax resident in the UK..."; HMRC Admin 10 a month ago states "As a UK tax resident, you are liable to pay tax on it whether it is in an Australian or UK bank account"). So, to be really clear, If I take the entire value of my Australian Super as a lump sum and transfer this to the UK, noting that the contributions to the fund and all gains made on it have already been taxed by the Australian Government, will I have to pay any UK tax on this lump sum?

Hi Ian Anstey,

Under Article 17 of the Double Taxation Treaty, 
DT19939G - USA: Double taxation agreement, Article 17: Pensions, social security, annuities, alimony, and child support
the lump sum would be taxable in the UK as only pensions and annuities are covered.

Thank you.

The article ion Double Taxation seems to refer only to the USA. Can the tax paid on initial contributions and growth within the SMSF be offset on lump sum withdrawals?