Ken

17 minutes ago, Kat G said:

Hi there, just a quick one. Is the weather in Melbourne really that bad? I’ve seen a lot of negative comments about it on here (although lots of old threads) but on paper it looks at worst pretty mild to me! I’m from the UK - so surely it’s got to be an improvement!

On average Melbourne's weather is better than the UK. The problem is that it doesn't stay average (or anything else) for long. In the summer it can be 40 degrees and then drop to 20 in the course of an afternoon. Winters are never what I would call wintry. I've heard stories about giant hail showers but in 9 years in Melbourne I didn't see anything worse than light hail and that very rarely. It does however get very autumnal for 6 months of the year. It's frequently windy (more so than in the UK in my experience) even during the summer months.

14 minutes ago, InnerVoice said:

Thanks @Andrew from Vista Financial. I looked into the possibility of transferring it about 5 years ago and I was informed at the time that it probably wasn't going to be worth it unless I had around a quarter of a million. My pot is considerably less than that, but I'm happy to get a second opinion at some point though. I was under the impression that there are also fees to be paid to HMRC in the event of a transfer because they have given me a 20% tax credit on all my personal contributions.

If the amount of AFE is relatively small, then there is also the option of transferring it to Australia and paying it in to your own super fund yourself as a voluntary contribution which you are claiming as a tax deduction and then only paying 15% tax on it rather than the full whack. There's a host of things you need to comply with and the amount you can contribute in this way is severely limited, but if your total fund isn't already too large (and you didn't pay in the maximum in previous years already), you can use underpayments from previous years too.

3 hours ago, InnerVoice said:

Thank you! @Ken That's a super-useful post for me, and hopefully for the OP and others too.

I've been wondering about how I could take the '25% tax-free lump sum' from my UK pension without paying too much (or ideally, no) tax. Based on what you've stated above, I assume that HMRC would not tax that first 25% at all because it's considered totally tax-free based on UK laws. I assume I would need to declare that amount in Australia, but would the ATO treat it as taxable income or a capital gain? Would I be correct in thinking that if I was residing in a country where tax on overseas income is exempt, then I'd pay nothing at all in either the UK or the other country (assuming a DTA existed between the two)?

Yes, if you are a permanent resident or citizen the ATO would treat it as taxable income. The value of your pension fund at the date you moved to Australia (or became a permanent resident if later) is not taxable income, but (depending on how you take your pension) the tax-free portion is the last part of your pension that you draw down, so if you're taking lump sums that first 25% would likely be entirely taxable while later lump sums could be partly or wholly tax free. If, however, you commence a pension, and the only lump sum is the 25%, it's a matter of valuing the worth of the lump sum when you moved to Australia separately from the pension. In that case you would get some of it tax-free, as only the growth is taxed.

The pension portion wouldn't necessarily be fully taxed either since you are entitled to get the purchased value of the pension (the amount you paid in) tax-free. Unfortunately, unlike with the lump-sum, the tax-free portion is only the amount you personally paid into your pension and all of the growth before you moved to Australia, plus any amounts paid in by your employer would still be taxable. Furthermore, claiming this UPP isn't particularly easy as you have to prove what you paid into you pension decades ago and get the ATO to approve it, and then it's often a tiny amount compared to the growth of your pension so many taxpayers don't bother. Some taxpayers mistakenly believe they can automatically claim an 8% UPP. That however is the rate that the ATO has granted for UK state old-age pension. For a personal pension you have to get the rate agreed with the ATO.

As to your other question, if you were residing in a country where tax on overseas income is exempt (and this includes Australia if you are a temporary resident) then you would pay no tax at all on the 25% as that is tax-free in the UK. That would apply whether or not a DTA existed between the two countries. If there was a DTA it's theoretically possible that the other 75% would be tax free in both countries (if taken as a pension and not as lump sums) - but I don't see that working for temporary residents in Australia nor do I think a DTA would be agreed that passed taxing rights on pensions to a country where they would be tax free.

On 22/06/2023 at 18:15, ToowoombaBlue said:

Has anyone else had this issue?

I have a private UK pension on which I pay tax on the occasional lump sums I take at  HMRC standard rates. This is despite them being aware that I am an Australian citizen residing permanently in Australia. I completed a form declaring Australian residency back in 2015.

Now in accordance with Australian tax laws, I also declare these lump sums and my tax is adjusted accordingly here.

I’m in the process of claiming the UK tax back, but it is proper inconvenient!

How can I get them to play ball?

HMRC have recently changed their approach and ruled that lump sums are not pensions under the terms of the double taxation agreement. That's important because pensions are only taxed in the country you are resident in per the double taxation agreement, whereas other income is taxed first in the country they are sourced (in this case the UK) with that tax paid being an offset in the country where you are resident (in this case Australia). You still only have to pay one set of tax, but instead of it all being paid in Australia it's paid in the UK plus a top-up (assuming the Australian tax rate is higher - which it generally will be in you live in Australia as you'll have more income there) in Australia.

It's different if you are actually receiving a private UK pension and not lump sums. In that case as @rammygirl has said you complete the forms, send them to the ATO to verify them, who send them to HMRC, who (provided they agree that it's a pension) will eventually inform the pension company not to deduct tax at source.

On 23/06/2023 at 11:49, LA7000 said:

So I am thinking of flying back to the UK to complete my bike licence as it takes over 2 years to get a full licence in Victoria , I am going to complete a direct access course which will provide a full unrestricted bike license within a week. My question is, I have already converted my UK driving licence to an Australian one will it be an issue getting the unrestricted bike licence added to my current Australian licence?

If VicRoads have already converted your UK licence into a Victorian licence, I don't see them accepting a new UK licence to convert - especially if the date for passing the test is after the date that they have for you becoming resident in Victoria. So, yes, I'd expect it to be an issue. I could be wrong though since the bureaucratic mind does not always work the way you would expect.

5 hours ago, Marisawright said:

I assume that's for people who want to pay ongoing contributions?   If you just want to backpay missing years, they send you a letter with instructions how to pay and it's straightforward.  I didn't need to phone anyone.

No, I only want to backpay missing years, and I can see on the forecast exactly which years they are and how much the cost is (including one that is partly paid). There is however no information about how to pay other than a phone number (there is a payment link but that requires an 18-digit number starting with 60 which is not provided on the forecast). How did you get them to send you a letter?

3 hours ago, Nemesis said:

Same here, I paid for missing years by cheque and by bank transfer, having had letters from them. Never needed to phone anyone. Very easy to do, though it takes a good while for the payments to show on the account. 

So how did you obtain the letter?

Obtaining the forecast is easy but they make it make very difficult to actually pay them. You have to phone to obtain an 18 digit reference number before you can do so.

On 03/06/2023 at 16:55, AliG said:

Bumping an old thread because I was looking at first time buyer stamp duty concession and came to the conclusion that i wouldn't get the concession as i have owner property abroad - but it sounds like others have had different experiences?

Heres what QLD gov website says:

To be eligible for a first home concession when you buy or acquire a home, you must:

• be legally acquiring the property as an individual
• have never claimed the first home vacant land concession
• have never held an interest in another residence anywhere in Australia or overseas
• be at least 18 years of age (we explain below when we may waive this requirement)
• move into it with your personal belongings and live there on a daily basis within 1 year of settlement (this time cannot be extended)
• not dispose (sell, transfer, lease or otherwise grant exclusive possession) of all or part of the property before you move in
• be paying market value if the residence is valued between $500,001 and $549,999.

That's much stricter than in Victoria. The Victorian rules (where we got the first home owner concession back in 2016) regarding previous home ownership still are:-

You’re not eligible for the FHOG if you or your spouse or partner have already:

• received the FHOG in Australia
• owned a home or other residential property in Australia, either jointly or separately, prior to 1 July 2000, or
• lived in a home in Australia which either of you owned or part-owned on or after 1 July 2000 for a continuous period of at least six months.

On 29/05/2023 at 21:23, Marisawright said:

OnePath was singled out by the regulator for having no less than 33 dud super funds. 

 

OnePath also managed a lot of super funds that weren't duds. The risk here is of people moving funds out of one of OnePath's performing funds into a dud fund with another provider on the basis that the other provider has less dud funds. It's not going to help.

It might help if each provider only had one fund in that it would be much easier to track and compare performance, but that would obviously be seen as reducing consumer choice.

5 minutes ago, unzippy said:

Is it a thing in Aus then, you switch your pension like you would car insurance?

 

It's easier than switching car insurance - but as with car insurance most people don't bother to do so.

5 hours ago, InnerVoice said:

This emphasizes the importance of getting professional advice on tax matters and not relying on what well-meaning folks say on forums!

Happy to assist if required. Yes, temporary residents are exempt from tax on foreign income. Target foreign income does still to be declared (even though it is not taxed) as it impacts your entitlements to some benefits (although as temporary resident you are not normally entitled to them anyway).

Origin Tariffs increase from 1 July too:-

Charge description                 Charges as at 30 June 2023                     New Charges from 1 July 2023                      Difference
Controlled Load 2 Usage               19.777 cents per kWh                                23.122 cents per kWh                       3.345 cent increase     (+16.9%)
General Usage                                 25.559 cents per kWh                                31.724 cents per kWh                       6.165 cent increase     (+24.1%)
Daily Supply - Controlled                 3.017 cents per day                                     3.696 cents per day                        0.679 cent increase     (+22.5%)
Daily Supply                                    117.155 cents per day                                132.649 cents per day                      15.494 cent increase    (+13.2%)

47 minutes ago, formerlondoner said:

If I am transferring money to a Wise account from my UK account will I pay a fee? Someone said it won't cost money to go from GBP to GBP but does Wise include a UK sort code?

No fee for transferring from GBP to GBP (in either direction). Yes, Wise has a UK sort code for GBP.

There is a fee for transferring from AUD to AUD out of (but not in to) Wise. The fee is 57 cents.

PS: Sorry, I didn't notice that InnerVoice had already answered this.

2 hours ago, rtritudr said:

I don't think this would even meet the threshold for lying under the Migration Act.  As I said you could reasonably argue that as you did not hold any other valid passport you answered no to the question (not even a question really, just a button that says "add another passport").

It does occur to me though, that if your UK passport number was already in the system (because it was the one you had at the time you applied for citizenship say) shouldn't they automatically know that you weren't eligible and reject your application? Be interesting to know from someone who has tried this.

There was a time when applicants were advised not to do their medicals and police checks until they were asked for them, as processing could sometimes take more than a year and the checks would be out of date by the time they were needed. Thankfully that's not the case (for most visas) now, but you still don't need to provide them at the time of applying.

2 hours ago, rtritudr said:

So suppose that you managed to obtain an "illegal" visa as a citizen because of the poorly worded question which you have answered honestly as you do not hold a valid Australian passport, what possible sanctions could there be?

That's a very good question considering that the only penalties that seem to exist for lying on a visa application are not issuing or cancelling a visa and not allowing you to apply for another visa for 3 years (or 10 years in the case of a public interest criterion 4020 whatever that is).

On 03/06/2023 at 22:10, Melbpom said:

I know someone moving back to Australia from the UK. They have dual citizenship.

They are planning to sell their house prior to the move. The query is, is it better to wait for the completion of the sale before boarding the plane? Or wait for the money?

Is there a change in tax status as soon as they arrive back in Australia and would that trigger capital gains in the UK?

 

As a general rule it's when the sale becomes final, not when the money changes hands. For UK house sales that generally means exchange of contracts rather than completion date, but as InnerVoice  has pointed out if the sale falls through at the last moment it could be awkward. But I wouldn't expect any actual tax to be paid since even if the sale is deemed to be when they are in Australia, they will still have primary residence exemption in the UK (I think for 18 months after they stopped living there) and main residence exemption for Australian CGT (for up to 6 years).

There is a change of status that occurs when they arrive back in Australia because they become non-residents in the UK and they become residents in Australia. However, if the date of sale is shortly after they moved, the only practical difference is that they would be required to report the sale to HMRC within 60 days.

On 08/06/2023 at 20:12, Marisawright said:

If you're transferring GBP into GBP then there aren't going to be any exchange fees. 

It used to be that Wise charged a fee for Australian residents holding more than 13,000 GBP in their account (there was a separate limit for each currency so you could have a lot more than that provided it was spread across multiple currencies) due to the rules for a "Purchased Payment Facility" that Wise operate under in Australia requiring them to hold extra capital in excess of customer balances.

I'm pleased to say that fee has been scrapped as of June 2023. Basically, rising interest rates mean than Wise can now earn enough interest on your deposits (they don't pay you any interest) so they no longer need to charge any extra to cover that expense. So, you can keep any amount you want in your Wise account fee free - just be aware you'd be better off if it was in an interest-bearing account somewhere else!

Beyond the lack of any interest, the only remaining disadvantage of a Wise account over a traditional bank account that I'm aware of is that you can't deposit a cheque in it. Thankfully cheques are dying out, so it won't be the issue that it once was for much longer.

On 05/06/2023 at 14:10, mxh said:

I'm thinking of selling my (currently rented out) house in the UK and bringing the funds over to Aus.

It's been rented out for 10+ years now, and I lived in it for about 15 years before moving over here.

When it comes to CGT, I'm aware that I'll need to pay some, but I'm wondering if there are any tips on minimizing this. I think I'm right in saying that you can 're-base' the value of the house as at 2015 and use that as the starting point for CGT calculations (ie CGT will be based on the difference between that 2015 value and the current value). Is that correct? Anything else that's worth knowing about.

And yes, I'll probably talk to a financial advisor at some point, but at this stage I just wanted to get an idea of any strategies that may be available.

As Andrew has told you the 2015 date is only the date for UK CGT (prior to that date there was no CGT on residential property, but non-residents have been hit by it since then).

For Australian tax it depends upon when you became tax resident in Australia (on a permanent not a temporary visa) but there are ways of reducing your CGT further, including classing the property as your principle private residence for up to 6 years after you stopped living there (you can only have one PPR at a time though so you have to be careful with that) and the 50% discount for owning it for more than one year (but note that this also reduces the amount of UK tax paid that you can claim as an offset by 50%) and as Andrew has touched on you can reduce your tax bill by making a concessional contribution to Super. Talk to a Tax Agent.

Also beware that selling a property in June means paying the tax an entire year earlier than if the sale is in July as it's in an earlier tax year - for UK property sales the date you exchange contracts should be the date that applies for tax purposes even if you don't get the money until later.

Way back in the 1990s when I was working in Poland, I was told by Barclays that I'd have to close my account because I was non-resident. 

I opened an account with Nat West in the Channel Islands - who insisted I close it after I moved back to the UK.

I think the banks just enjoy causing as much inconvenience as possible.

1 hour ago, InnerVoice said:

@jldathome thank you for that info. I think we may have different accounts, although I will still check with them anyway. My account only supports Australian dollars, so no GBP funds, and is now called Citi Australia (although it used to be Citibank Australia). This is where I log in...

https://www1.citibank.com.au/

NAB didn't acquire Citibank Australia in order to close it down. Your account will be open for the long term. However, if you look on their website there is no mention of foreign currency accounts. This would appear to be a service that Citibank provided that NAB have not continued.

I don't think the problem is with the safety of you using your wise account, but with scammers getting people to transfer to their wise account. Virgin money has therefore decided that the risk that someone asking to transfer money to a wise account is being scammed is too high for them to bear.

19 hours ago, Ausvisitor said:

You say your wife is a contractor and working for UK companies while in TAS.

Is she doing that through an AUS employment/business model or through a UK limited company.

Because if she is still invoicing through her UK company she won't be classed by the bank as working in AUS and so that 12 months will drag on and on

If the bank considers the contracting to be self-employment, she'll need 2 years of accounts not 12 months.

That would be a balance transfer (unless your current finance company has a pay by credit card option - which is very unlikely). The difference is that when you make a credit card purchase the company that you buy from pays a fee to the credit card company (sometimes that fee is charged back to you as a credit card surcharge) so the balance on your card is more than it cost the credit card company.

When you make a balance transfer your new credit card company has to pay the full amount and doesn't receive anything back from your old lender so the balance on your card is the same as it cost the credit card company (and possibly less if you consider the bank fees that the credit card company had to pay).