UK Tax on Australian Superannuation

Hi HMRC Admin 10, thank you for the response. I believe that I am eligible for split year treatment. I will arrive in UK on 16 November and will be resident in UK from 16 November. The lump sum will be paid to my Australian bank account before 5 November. Does this mean that the lump sum will not be taxable in UK?

Hi,

If you claim split year treatment and the payment is made before you are resident in the UK, then it will not be taxable in the UK.

Thank you.

I am a dual citizen of Australia and UK but now residing in UK. I am also UK domiciled for tax purposes. I worked in Australia for 5 years from 2003 to 2008. I have taken serious ill health retirement and I am eligible for a tax free lump sum from the pension and a tax free lump sum from the pension death benefit. As these two lump sums are tax free in Australia and I qualify for serious ill health retirement, will I be subject to UK tax and do I need to declare these lump sum payments in my self assessment?

Hi Susi,
Yes, under Article 17 of the double taxation treaty they are taxable here.
Please aslo refer to helpsheet 264 as you state you have domicile status: 
Remittance basis 2021 (HS264)
Thank you. 

Hi, I have posted here before, but to be honest, I am not really following the threat. I have been in living and working Australia for quite a time, and I am now considering returning to the UK in retirement. Retirement for the over 60s in Australia is generally tax free, so I haven’t really given much consideration to the matter. There is a requirement for UK residents to pay tax on any lump sum received from superannuation. Therefore, if I need to take a lump sum, doing so before I move to the UK would seem sensible. It appears to me that a small about of planning could negate my need to pay any tax; by not being a UK resident in the year that I receive the lump. In the web site advice it is written. 2.2 Second automatic overseas test. You’ll be non-UK resident for the tax year if you were resident in the UK for none of the 3 tax years before the current tax year, and spend fewer than 46 days in the UK in the tax year. Am I correct in assuming that if I spend less than 46 days in the UK (I do not have family ties or a residence); for example, if I move back on 1st March 2024 I will pay no UK tax on any lump sum that I take in the current tax year.

Hi
If you meet the conditions specified at point 2.2, then no tax will be due.

I read somewhere that if money is withdrawn from an Australian pension fund as a lump sum by a dual citizen now resident in the uk and is placed in an Australian bank deposit account, that this is not taxable as it is considered as savings , is this correct?

Hi,

A lump sum payment would not be taxable in the UK, but regular periodic payments would be.

Thank you.

So are you saying that if you took any amount of lump sum from a super fund based in Australia say once a year , there would be no tax liability in the uk whether it was deposited In an Australian bank account or remitted to the uk, as long as it was not a regular , say monthly , withdrawal?

Hi Daiput,
Please refer to Article 17 of the tax treaty
UK/ AUSTRALIA DOUBLE TAXATION CONVENTION
The payment could be a pension or an annuity and it is this that determines whether taxable or not.
Thank you. 

Thank you for the reply , however Article 17 of the tax treaty is of no relevance, a withdrawal of a lump sum fro the pension fund would be purely that, a withdrawal, a non regular withdrawal of funds deposited from savings into the pension fund. From your earlier response it would appear that this is not subject to UK tax as it is merely a withdrawal of previously taxed contributions introduced to the account. Could you please give a definitive answer without reference to the articles as they generally do not cover the question asked or are too ambiguous .

Hi Daiput,
We can only provide general information / guidance in this forum.
For an answer to a detailed question of this nature, you would need to contact our Self Assessment helpline or seek professional advice.
Self Assessment: general enquiries
Thank you. 

I am dual UK/Australian citizen living permanently in the UK since June 2013, I worked in Australia from 2008-2013 and have built up approx $106000 in my QSuper pension account (approx £55,000) which I can access at 60 years old in 2026. I am currently self employed and plan to take early retirement at 60. I have two other small pensions and as I see it I have two options with my QSuper balance:- 1. Take the whole lump sum and close the account however would I be liable for tax on this and how much % would I have to pay? 2. The second option would be to open a Retirement Income account and have an annual set amount paid into my Australian bank account (then transferred to my UK bank account) the amount I have in mind plus my two other pensions would amount to less than £12,570.00 per year so I would not be liable for tax - is that correct? The money in the QSuper would last me until my State Pension kicks in when I am 67 years old.. Thanks in advance for any answers to my two questions!

Hi, I am a dual UK/ Australian citizen currently living in the UK but considering returning to Australia. What residency rules apply to withdrawing my Australian superannuation in regard to tax? Would I have to be resident for the whole tax year if I had been in the UK for the preceding years?

Hi Helen
If you are UK resident and still living in the UK when you withdraw the pension, you would need to declare it here. If you wait until you leave and are no longer resident it would be classed as Australian income only.

Hi Terese
HMRC cannot comment on future events as legislation/plans may change

Understood but my main question was if I take the balance as a lump sum and close my QSuper account will I pay tax on that lump sum in the UK as I’m now a UK resident?

Hi Kate 66
Under Article 17 of the double taxation trreaty, yes the pension is fully liable in the UK.

A dual citizen of Australia and UK now resident in UK for tax purposes, my pension fund is in Australia with a fund manager, if I was to withdraw that fund and reinvest the proceeds in a rental property in Australia as a pension fund, would the encashment of the fund be treated as a taxable event in the UK ?

Hi Daiput,
Article 17 of:
UK/ AUSTRALIA DOUBLE TAXATION CONVENTION
Advises that Australian pensions and annuities paid to residents of the UK, are taxable only in the UK.
Any withdrawal from your pension will be taxable in the UK, even if you keep the money in Australia to buy a property.
Thank you.