Sue Ashforth
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UK State Pension - Deferred Lump Sum Tax Implications
Sue Ashforth replied to Sue Ashforth's topic in Money & Finance
I don't know where you get that idea about UK tax from but I can assure you it is not true. In the UK your pension is treated as income from earnings and if pushes you into the next tax bracket when added with other incine then the tax brackets work in the usual way and you will pay more tax incrementally. So it works exactly the same way in Australia, although I would still defend Australia's right to do things different if it so wishes. Hi Bungo, If you look at the UK tax website, it tells you "The rate of Income Tax to be used to charge any state pension lump sum is the highest (or marginal) rate that applies when charging the individual's other income to Income Tax. Section 7(5) confirms, firstly, that if the individual isn't liable to tax for the year of assessment on their other income, no tax should be deducted from any state pension lump sum. Otherwise, one of three rates of Income Tax apply, as follows...." I would also defend Australia's right to have their own tax system; all I'm saying is I wish we'd known beforehand (our own fault, I know). -
UK State Pension - Deferred Lump Sum Tax Implications
Sue Ashforth posted a topic in Money & Finance
BE AWARE!!! We've been Australian residents for almost 4 years now; last year one of us decided to claim our deferred UK State Pension (it was deferred for 20 months). As you may know, if you claim this in the UK, it is NOT able to push you into the next tax bracket and so you pay tax at the same rate as your other income (ie low earners pay 20% tax). However, the tax implications in Australia are different - the one-off payment has pushed us into the next tax bracket so instead of paying only 19% as low income earners, we have to pay 32.5% (on income over $37000). Not only has this greatly increased our tax payment but the Medicare Levy is high too. We do understand that we have to pay tax and the Medicare Levy but I do wish we could have found a way to only pay the UK 20%! Perhaps we should have deferred our Dual Tax Agreement.................. -
I understand that I can claim UPP (Undeducted Purchase Price) deductions to all pensions received from the UK, whether private or government. I know the UK State Pension is a UPP but how can I find out if my former works pensions are also UPP's? Can anyone advise please?
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Good luck to you Cakey! We're due to fly out next Thursday (4th August) and it's an absolute NIGHTMARE trying to sort goods out ready for the shippers, giving stuff away, deciding what clothes we can take and what we need to ship separately - as well as letting the house (as we can't sell) and all that paperwork! I know all the stress will disappear as soon as we start our journey - but I'll tell you something, we're NEVER emigrating again! For better or worse, we're staying in Oz!!! Best wishes .............
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Our little label has cost about £60,000 - no way did we want an empty passport! We got our label without asking - posted the passports Wed evening and got them back Fri morning (unbelievable!) - I cried when we got them, I was so happy! 18 months of agony and a small fortune - it's well worth it!!
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We went to the one in Manchester earlier this year - fantastic guys! They even gave my husband a copy of his x-ray on a CD! The doctor also rang him at home to warn him about his blood sugar being a little high, recommended to see our own doctor to get medication upgraded.. They're brilliant and have our highest recommendation!
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You jammy beggars! We're coming over on 4th August (to Port Macquarie in NSW) so WATCH OUT for us!! Glad all going well for you so far and hope it continues to do so! All the very best in your new life!
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Phoebe - forgot to tell you that the lump sum is taxable at 20% for standard tax payers!!
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Hi Phoebe I understand you can leave it as long as you want - but you're only allowed to defer it once! I got a bit paranoid and did a spreadsheet - worked out that you don't get much advantage over the years as to whether you take a lump sum or higher pension. You can decide whether to take a lump sum (this is what you've deferred plus 0.5% interest over the base rate), or whether to take an increased pension. It would be better if the bank rate was higher, of course! I deferred mine for 18 months then I had to draw it to pay towards my Assurance of Support! Full details are available on the Government's website - just type in 'deferring my state pension' into Google. Good luck!
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Glad you got there Sandch - we'll be following soon as we sell the house! Which area have you gone to? Do you like it better than the UK?
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I just looked up gainwave.co.uk on Google and registered - it's really easy! Good luck....
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We got our CPV143 visa today!!!! SO EXCITED!!! We applied in April 2009 so keep your chins up, those of you still waiting! Can't believe we're actually going - mind you, we've got to sell the house now and that will probably be the biggest hurdle. GOOD LUCK to everyone waiting!!
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Thanks June - I'm definitely cracking open the (old) bottles of champagne when we do! Don't drink much so they've been lying in the cellar for about 7 years but can't think of a better excuse to pen them! How are you feeling? It's the wait that's so frustrating for me - can't pack anything, can't plan anything!! We're so happy for you!!
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Hi June - still waiting for ours! Sent AoS through on 8th October - expected to hear by end last week! Please keep your fingers crossed for us!! Hope everythig goes well with the house sale and that your journey is a happy one - you sound SO EXCITED!!! CONGRATULATIONS!!!!!
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Hmmmm- just had a look - not good is it? I've been looking at realtimeforex.com for the past few weeks which gives trader tips - maybe I'm naive, but it says that it expects rates to rise towards 1.69 by the end of the month so I was just hoping maybe I could get 1.67..... I had to cash in my deferred state pension to raise the extra few grand... Thanks for your reply anyway - fingers crossed!!
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Good idea but I've just set one at 1.67 - do you think this is a bit optimistic - we're hoping to receive the request for the 2nd VAC within the next week or so and understand we have 28 days to pay? We're just going to have to go ahead anyway if the rate doesn't rise - but it's been hard trying to raise the extra capital without putting the house on the market!
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Same here - we're waiting for our 2nd VAC demand. I'm checking with Reuters daily and UKForex - although Realtime forex have some worthwhile tips on GBP/AUD (trader tips) - I'm no expert but you start to get the hang of it after watching it for a week or two! Expect the spending review today will sway the rate wildly - one way or another - but could be a good time to get a better rate?? Who knows?
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Hi Phoebe This may help from ANZ Bank, based in England: "When you open an Australian bank account before you move: <LI class=BulletNormal>it will allow you to transfer money into your new account before you arrive, so when you land, you can access your Australian dollars almost immediately <LI class=BulletNormal>may give you the opportunity to take advantage of favourable exchange rates <LI class=BulletNormal>you can provide your account details to your employer ahead of time <LI class=BulletNormal>provides you with the opportunity to take advantage of competitive interest rates on savings accounts. When you open an Australian bank account before you move: <LI class=BulletNormal>it will allow you to transfer money into your new account before you arrive, so when you land, you can access your Australian dollars almost immediately <LI class=BulletNormal>may give you the opportunity to take advantage of favourable exchange rates you can provide your account details to your employer ahead of time provides you with the opportunity to take advantage of competitive interest rates on savings accounts. " [*] [*]You can find them on Google [*]xx
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What about BLIMPS? (Blooming Limeys in Mornington Peninsula)? Exellent idea about threads - anyone going to Port Macquarie (NSW)?
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Sorry PhobeW I meant to reply to Suescliff2 - anyway, sounds like we're al doing the same thing! Good luck to you, too!
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Hi PhoebeW We applied for our CPV143 in April 2009, got our CO on 6th Aug 2010 and are just waiting to pay our AoS. Like you, we have a daughter & 2 children in Oz (been there 15 yrs) and a son with 3 children in the UK. It's so difficult to leave anyone behond, but we now have my son's and my sister's blessing and they said they'd do the same if they had the chance. We've visited Oz about 8-9 times but not travelled that much. We're really looking forward to it and we can still come back for holidays to see the family. We're also set up on SKYPE and have a web-cam, so we can see our relations in the UK whenever we like (so long as they have the same set-up). We have lots of (small) concerns but what the heck! You only live once and we're really looking forward to getting our visa. Hope to go to Port Macquarie (NSW) next year but probably have to come back to sell the house, then we can go back for good. Good luck to you - hope you're not waiting too long! If you'd like to know our experiences to date with the process, feel free to ask! Best wishes, Sue
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No spare cash mate, trying to save up for Oz! I'll have a look though, may win the lottery before we come (how good would that be?). Maybe we could travel inside the container??!!
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We applied for our CPV (permanent) in April 2009, got our CO 6th Aug 2010, had medicals on 10th, police checks a week later. We had a couple of minor glitches so the 28 day deadline for returning forms has been extended to 19th October. We expect to pay our AoS shortly after that, then our 2nd VAC. Hopefully, we should get our visa Dec or Jan 2011 - doesn't leave us much time to sell home so we intend to have a holiday in around June next year, come back to sell house, then move to Port Macquarie SOON AS EVER POSSIBLE!!! Can't wait - but there's so much to do in between! Good luck to all those in the same boat (hmm - maybe a boat would be nicer tha flying??)
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We had a potential problem as my daughter doesn't earn enough to assure both me and her stepdad (her husband hasn't earned since May as he's on a training course). Fortunately, her sister-in-law has agreed to act as assurer for mny husband. All we have done is complete a Form 956 to appoint my daughter as an 'authorised recipient' and she is taking this to Centrelink next week at her appointment.
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What's your position just now? We just had our police checks done (returned 11 Aug), medicals done 10th Aug. My daughter's just arranging the AoS but has had to ask sister-in-law's help as an assurer as she's not earning enough (husband on Police training course and thus not earning this year). Happily, our CO has just given us a month's extension as my daughter's tax records and with her accountant. Altogether, it took about 457 days to get our CO which is a couple of months earlier than we expected. It's all good fun, isn't it?