Topping up Australian Super from UK

Hi,

Please could you advise on what the tax implications are (or any other penalties) for transferring money from a UK bank account straight into a Super fund?

thanks

This appears to now be in the regular Money and Finance forum so presumably anyone can now answer.

There are no extra tax implications from paying into your Super from a UK bank account. It's exactly the same as paying into your Super from an Australian bank account - unless of course you're trying to say that you're not resident in Australia which is a whole different issue. If you are resident in Australia the only "other penalty" you might want to consider is the exchange rate you get. You'll often get a better exchange rate by using a company like moneycorp rather than your bank.

This appears to now be in the regular Money and Finance forum so presumably anyone can now answer.

 

There are no extra tax implications from paying into your Super from a UK bank account. It's exactly the same as paying into your Super from an Australian bank account - unless of course you're trying to say that you're not resident in Australia which is a whole different issue. If you are resident in Australia the only "other penalty" you might want to consider is the exchange rate you get. You'll often get a better exchange rate by using a company like moneycorp rather than your bank.

With resident meaning (I believe) actually being physically in the country for more than 6 months in the tax year.

Hi,

 

Please could you advise on what the tax implications are (or any other penalties) for transferring money from a UK bank account straight into a Super fund?

 

thanks

Hello Naomi

Hopefully your question has been answered however as a Financial Planner I like to try and understand the reasons behind the intended strategy.

It looks to me as though you live in Sydney from your signature but your username suggests otherwise, not sure whether its because you never updated it when you moved to Sydney.

So I am curious as to what would drive you (either way living in UK or Australia) to want to contribute monies direct from a UK bank to an Aussie Super?

Thanks Andy.

Thanks for your responses.

I'm an Australian resident and I have a 2 bed flat in the UK with no mortgage which is rented out. That rental income isn't doing anything useful in the UK, so I was thinking of just plonking it straight into my Super. I suppose I'd just transfer sums across once they've grown to a reasonable amount. Does that sound like a good idea?

Thanks.

I don't believe there are any tax implications.

They would just be non concessional contributions as far as Australia is concerned.

As long as you don't go over the cap amount it shouldn't matter.

May be simpler just to pay in to super from your Aus account and ship the money from UK to your Aus account whenever, and as parley says watch out for the annual limit and the yet to come lifetime cap.

With resident meaning (I believe) actually being physically in the country for more than 6 months in the tax year.

No, that's not the case. That is how residency in the UK works, but not how it works for Australia. The residency test for Australia is actually quite complicated and you can be out of the country for quite a while before you are considered non-resident. There's a calculator for it somewhere on the ATO website.

Thanks for your responses.

 

I'm an Australian resident and I have a 2 bed flat in the UK with no mortgage which is rented out. That rental income isn't doing anything useful in the UK, so I was thinking of just plonking it straight into my Super. I suppose I'd just transfer sums across once they've grown to a reasonable amount. Does that sound like a good idea?

 

As we said before, do make sure you use a service like Moneycorp to transfer the money - don't just transfer from your UK bank to your Aussie bank or you'll get hit for fees (and get a bad exchange rate!).

Yes you can just transfer the sums across once they've grown to a reasonable amount, but if you're a resident you can get more benefit from them by claiming them as a personal contribution. It will reduce the tax you have to pay on your income.

To do that, at the end of the tax year you just ask your super fund for a form to fill in, declaring how much you paid in - then you claim that amount in your tax return.

Salary sacrifice, if you are not already doing so, would be a much more prudent and tax efficient method than voluntary contributions.

No, that's not the case. That is how residency in the UK works, but not how it works for Australia. The residency test for Australia is actually quite complicated and you can be out of the country for quite a while before you are considered non-resident. There's a calculator for it somewhere on the ATO website.

Thankyou Marisa, Yep! it is not so straight forward, reading through all the info it basically comes down to 'intent' of which the 183 day test is just one of the measuring criteria that may be used.

 

I'm an Australian resident and I have a 2 bed flat in the UK with no mortgage which is rented out. That rental income isn't doing anything useful in the UK, so I was thinking of just plonking it straight into my Super. I suppose I'd just transfer sums across once they've grown to a reasonable amount. Does that sound like a good idea?

 

Thanks.

 

Yes you can just transfer the sums across once they've grown to a reasonable amount, but if you're a resident you can get more benefit from them by claiming them as a personal contribution. It will reduce the tax you have to pay on your income.

 

To do that, at the end of the tax year you just ask your super fund for a form to fill in, declaring how much you paid in - then you claim that amount in your tax return.

Salary sacrifice, if you are not already doing so, would be a much more prudent and tax efficient method than voluntary contributions.

Thanks Naomi for confirming.

So the above two comments are potentially better ways of contributing to superannuation more tax efficiently, in other words pre-tax contributions as opposed to post-tax contributions but it is likely only one method may be applicable (perhaps none, depending on your individual situation).

Have a look here for eligibility to claim a tax deduction for voluntary superannuation contributions (this is typically suited to Self-Employed people): https://www.ato.gov.au/Individuals/Super/In-detail/Growing/Claiming-deductions-for-personal-super-contributions/?page=2#Are_you_eligible_to_claim_a_deduction_

Have a look here for information around salary sacrifice (for employees): https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-my-super/Salary-sacrificing-super/ of course it would not be possible for a person to salary sacrifice money in their bank account only their salary could be salary sacrificed however the money in the persons bank account could be used to bridge the net salary income shortfall that would be left by salary sacrificing.

Pre-tax contributions are known as concessional contributions however there are limits in place around how much can be contributed, see here: https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-my-super/Salary-sacrificing-super/

KR

Andy

Thank you to Everyone for your responses, I appreciate the info and advice.