Hello HMRC Admin 32
I could not find where or how to reclaim Witholding Tax on the self assessment foriegn income pages. Deducting it from income received in Australia doesn't fully redress the balance. Eg if $10 is deducted from an income of $100 and £90 then declared to HMRC, one will still pay 20% (or whatever is the marginal rate) on the $90, i.e. $18 meaning that $28 has been paid, ie 28%. To be fair the $10 witholding tax paid should be credited as part of UK tax on $100 i.e. $20 - $10 = $10 tax to pay. Australian income tax of any other sort than Witholding Tax can be offset in this way. I would have overpaid by $8.
My wife and I are dual citizens of Austrlaia and UK but now residing in UK. I have been perplexed by taxation relating to a small pension from employment in Australia.
I have been declaring all my pension payments in GBP using mid market exchange rates on my UK tax returns even though that money has never left Australia. We also similarly declare to HMRC, the tiny amount of interest paid on our bank account. From reading these pages, I now see that even though there was nothing to prevent me remitting funds to UK I have not "actually remitted" the money to UK and should not have paid UK tax on it. Added to this the ATO continue to deduct witholding tax at a rate of just under 10% (I am not sure how to stop that). Is there any way I can recover tax paid on wrongly declared (notional) income?
My wife and I use our Australian bank account while in Australia to fund our Australian holiday expenses wherever possible.
However, I am becoming more elderly and poorer by the year and may not be able to travel to Australia at some time in the coming few years. At that time I will have to decide what to do with any accumulated money remaining in Australia. I can see that all funds in our Australian bank account have had UK tax deducted due to my treating it as having been "remitted" so I would have no taxable income when I do eventually move money to UK. Also, some money in Australia was transferred there from our taxed UK income and savings in UK in anticipation of a long 'grey nomad style' holiday, which sadly did not happen as planned.
What ever about tax already overpaid I don't want to be challenged sometime in the future over remitting money from Australia which has already had UK taxation applied.
I am afraid that HMRC issued guidance on remitance and double taxation is not easy reading due to relatively obscure technical constructs used by the authors.
I emigrated to Australia in 1991 and left in 1994. I now have a small Australian Public Service pension which was chrystalized 12 years ago, and which is paid into my Australian bank account. I am now living in UK permenantly though I do retain my Australian Citizenship and Passport. I am a joint UK and Australian citizen - UK from Birth.
1. I have been declaring the pension income and interest on my bank account for UK tax for over 12 years but have not remitted any of it to UK. Have I been paying UK tax unnecessarily?
2. I also pay ~10% witholding tax on the pension in Australia - I'm not sure how to stop it and there is no way I can get credit for it with HMRC. What are my options?
(first post on this thread and I am not sure I have done it properly - sorry if I did it wrongly)