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Posted Fri, 28 Jul 2023 14:10:41 GMT by
Hello All, I have been a resident of UK from Dec 2009, a British citizen, also have non domicile status in UK. Prior to coming to UK, I was working in Australia from 2007 - 2009 & contributed to Australia Superannuation fund, I paid appropriate tax while contributing to the fund and when I left Australia in 2009, I had contributed around approx. 11000 Australia dollars. My fund was managed by a superannuation company & it has grown now (in last 13 years) to around 16000 Australian dollars. Currently my fund is with the company & gets reinvested every year. As I have moved out of Australia, I was exploring options to take out this money & was wondering about its tax implications. I just want to understand the following - If I take out the fund at once (i.e., Lum sum payment), what would be my tax implication in UK? a. Would I need to pay any tax in UK? b. Would I need to pay any UK tax for all of 16000 Australian Dollars? c. Would I need to pay any UK tax only on growth (i.e., for 6000 Australian Dollars) d. If I need to pay any UK tax only on Growth, As I have accused the growth over 12 years, will this be taxed in one financial year or can this be broken down under any specific rule? e. Finally, I won’t be remitting this amount to UK as I intend to gift this to my mother, will this be beneficial in terms of any tax benefit? Please do suggest if there is any other tax efficient way to take out my Australian Superannuation fund or is there any other dual tax benefit which I can explore, such that I can act accordingly.
Posted Fri, 04 Aug 2023 07:32:39 GMT by HMRC Admin 25
Hi nakshar,
The double taxation agreement between the UK and Australia does not allow relief for 'trivial commutation lump sums' (taking out the whole fund as one payment).
This means that you will pay tax on the pension in Australia, if you take the whole amount out.
It would not be taxable in the UK.
If not taken as a trivial commutation lump sum, any payment received from the pension would be taxable in the UK and not Australia.
You will need to consider the rules for the remittance basis as you may find that claiming the remittance basis more costly than declaring the pension.
Residence, domicile and the remittance basis: RDR1
Thank you. 
Posted Thu, 17 Aug 2023 14:42:30 GMT by
Thanks for your response. I just have a couple of follow up queries such that I am absolutely clear on this matter. I intend to take out the whole fund as one payment, and as the payment amount is around 15k Australian dollars : 1. As for Australia : it means I need to pay tax in pay tax on the pension in Australia. As the amount of pension in my case is less than 230K Australian dollars, I will be exempted from paying any Australian tax. I can further check this with Australian Tax Authorities. 2. As for UK : As I intend to take out whole fund as one payment, I am not liable for any UK tax. Questions : A. Is this above understanding correct ? So, In this case I can take out my remaining Australian pension without the need to paying any Australia or UK Tax. B. As I don't have to pay any UK tax, Do I need to declare this in any UK tax self assessment ? C. Finally, based on the above logic that no tax is due, claiming the remittance basis may not be applied or not releavant in this situation. Please do clarify if this is understood. Thank you.
Posted Fri, 18 Aug 2023 14:49:11 GMT by HMRC Admin 25
Hi nakshar,

A. Yes it is correct.  
B. As not taxable you do not need to declare it.
C. As its not taxable under the DTA, claiming the remittance basis doesnt change this and is still not taxable.
Thank you. 

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