Tigercrab

Thank you HMRC Admin 19 With respect, my last post seeks advice on existing legislation rather than hypothetical future events. Also this forum is full of hypothetical questions, and HMRC responses help people plan their future actions in a complex area. Is that not a key reason for the forum? May I ask, to any HMRC officer, three questions that seek clarity on HMRC's interpretation of the UK/AUS DTA? Is it correct that use of Art 4 para 3a of the AUS/UK DTA to establish AUS sole residency on the basis of one permanent home would be deemed by HMRC out of scope use of the DTA in the instance of lump sum drawdowns from a pension fund because lump sum drawdowns from pension funds are, in HMRC's opinion, not allowed under Art 17? What is the authority for HMRC to deem lump sum drawdowns from a pension fund out of scope since the text of the DTA is silent on lump sum drawdowns - ie the DTA does not say they are not allowed? Similarly, a literal reading of the text of Art 20 para 1 is that "wherever arising" includes the UK and Australia. Therefore, on what authority does HMRC deem Art 20 to be confined to third countries only? Thank you.

From Art 4 Para 3a of the UK/AUS DTA an individual who is resident of both UK and AUS but who has returned to AUS and no longer has a permanent home available in the UK shall be deemed resident only of AUS. When back in AUS that individual, if above a certain age, can access his Super on terms pertaining to super funds in Australia. Lump sum drawdown is standard practice with AUS superannuation funds in the so-called Pension or Income phase. It is an inherent component of "pension" as understood in Australia. So an Australian reading of Article 17 para 1 would be that any means of accessing your Super (ie Pension) would be allowable. Under what authority therefore do HMRC (eg via this forum and the Digest of Double Taxation Treaties) say that lump sum withdrawals are not allowed. The text of Article 17 is silent on lump sumps. The DTA therefore cannot be used as the authority to disallow lumps sum drawdowns: quite the contrary. If, under an authority not included in the text of the DTA, lump sums are disallowed, then lump sums become "an item of income not dealt with in the foregoing Articles" - ie the lump sum is in scope for Article 20 titled "Other Income" which specifically states "wherever arising". In geographical terms, "wherever arising" includes the UK and AUS. Under what authority therefore. for it is not in the text of the DTA, does the Digest state "applies only to income from third countries"? The ultimate authority is the DTA. Unless the text of the DTA specifically limits or modifies an interpretation - particularly one that is commonplace in one of the Contracting States - then under what authority does the other Contracting State impose a limitation? I would be grateful for comment on this and my earlier posts.

Having closed his superannuation account before the end of Jun 23 (the end of the Australian tax year), John will submit his tax return to the Australian Taxation Office covering his global income for the year up to 30 Jun 2023. This procedure will be as he has done every year for the last 23 years. This year he will additionally obtain from the ATO a "Certificate of Residency" asserting that he was Australian resident for tax purposes up to 30 Jun 2023.

Thanks HMRC Admin 10. Having done further research into the DTA etc, I need to give you more information. My friends are a married couple: John and Janet. Both are dual UK/Aus nationals. They are downsizing from their previous large house and are hoping to be able to have permanent family homes in both Australia and the UK. They have lived and worked in Australia for the last 23 years. John's global income (mostly his salary from work in Australia) has been taxed only in Australia as per the DTA. For the last 23 years they have only holidayed in the UK on 3 brief occasions. John ceased full time work in Australia in early March 23 at the same time as they sold the large home that they both owned. Janet has already purchased the permanent family home in Australia which they both occupied before John left for the UK at the end of March 23. John is in the UK primarily for a holiday but also to begin exploring the feasibility of acquiring the UK permanent family home. John is presently only in the UK on a temporary/holiday basis for 3 months and will return to the permanent family home in Australia before the end of June 23. John contends that he is tax resident only in Australia for the Australian tax year ending Jun 23. Under the terms of the UK/Aus DTA (Article 4 para 3a) John is deemed resident only in Australia since Australia is the only State in which he has a permanent home. This is reinforced by the tiebreaker terms of INTM154020 (Double taxation agreements: residence: Dual residents). John is planning to return to the UK in July 23. If he does so, this will be to focus on searching for the UK permanent family home. Looking ahead and assuming he buys a permanent family home in the UK (not before Oct 23 at the earliest), John is likely to spend the bulk of his future time in the UK but will periodically return to the family home in Australia. Janet is likely to spend the bulk of her time in Australia but will periodically spend time in the family home in the UK. Janet and John will remain married. If and when John buys a permanent family home in the UK and spends the bulk of his time there, John's "centre of vital interests" will shift to the UK and (as per DTA Article 4 para 3a) he will be deemed UK resident for tax. Since under the terms of the DTA John will be resident for tax only in Australia up to the end of the Australian tax year on 30 Jun 23 and will be in Australia at that time, John contends that he can withdraw all monies from his Australian superannuation and close that account before the end of Jun 23 and be liable for tax on that superannuation only in Australia. Grateful for HMRC comment.

A friend (a dual UK/Aus national but originally born in and had worked in the UK) had been resident and working in Australia for over 15 years. For those 15 years he paid tax on his global income in Australia. He had a small sum (only about $15k) in an Australian superannuation fund. In early March 2023 he sold his sole residence in Australia in preparation for returning permanently to the UK and, since he is over 65, put $400k of the proceeds of that sale into his Australian super fund as a safe place to hold the money pending his move to the UK. He moved to the UK a week later in late March 2023. He now (less than 3 months later) wishes to bring that $400k to the UK as a lump sum. Given that he put a post-tax lump sum into the fund only three months for safe keeping and was unaware of the provisions discussed in this forum, will he be liable for UK tax as he brings that $400k into the UK?