BillW

1 hour ago, Marisawright said:

I can't read the article because a subscription is required. 

 

Marisa,

HMRC provide a worked example here 

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim75550

Looks interesting but needs a trained brain to get it right.

Bill

On 20/03/2024 at 17:55, Marisawright said:

The idea may have arisen because until a few years ago, reporting on international money transfers was sketchy, and people could get away with transferring lump sums, not declaring it to HMRC and no one was any the wiser.    Now, the ATO and the HMRC share information, so that avenue -- which was always illegal anyway -- has closed.

I don't think what is proposed in that newspaper story is illegal, it does include full disclosure to HMRC, but yes it is complicated to a layman like me and appropriate further advice from a suitably qualified person will be sought. I believe I have the relevant data.

One of the things I learned during my working life was that I can give the same data to different engineers and get quite different answers to a problem and am guessing the same could be true for asking an appropriate expert to interpret and apply the appropriate HMRC calculations if its done wrong and HMRC do not agree then that could be a problem.

Does anybody know if its possible to get a calculation done and ask HMRC if its been done correctly before formally submitting it ? 

For example work "with" HMRC rather than against them - I will always remember one particular river diversion project where the statutory authorities were included in the calculations and asked their opinions on the plans before any dirt was excavated - that's an intelligent way to work with statutory authorities.

Bill

Ken Alan and Marisa,

Thanks for the various replies ........

Have a read of this, written in 2023 in the Telegraph - seems to imply that lump sum withdrawals are possible if you have access to the data to do the calculations required

https://www.telegraph.co.uk/money/tax/tax-hacks/draw-down-australian-pension-savings-taxed-twice-uk/

admittedly I don't know much about that calculation but happy to investigate and learn about it. Just gotta wade through the relevant HMRC page a dozen times.

Hello,

5 years since the last message posted.
 

Any huge changes to policies or workarounds or ideas in that time ?  I do get the impression that there are ways of minimising the tax you pay on Australian super in the UK but it requires some planning and consulting with a specialist accountant or tax agent well before the move to the UK and this can be very expensive.

HMRC have a forum where Aussies keep asking variations on this question for the last 4 years and HMRC responses are basically "You are taxed on your worldwide income" and there are various references to HMRC web pages that can be quite difficult for a layperson to understand. Worth a look if you have not seen it before.

Took me a while to understand the differences between UK and Australian retirement systems

UK : No tax on the deposits, no tax on earnings, taxed on the way out

Australia : Taxed on the  deposits, taxed on the earnings, no tax on the way out

I read somewhere that the double tax agreement gives the UK the right to tax you on your Australian pension if your are resident in the UK

I have seen hints in various places that one lump sum withdrawal per year might be a partial workaround and could be useful if you have nor set up the allocated pension yet - ie if you are still in accumulation. 

So any new ideas from anybody ? Any consultants or accountants you can recommend ?

Bill

Hello,

Anybody had any interesting experiences or revelations since the last post was made ?

This is interesting  https://www.gov.uk/government/publications/pension-tax-for-overseas-pensions/pension-tax-for-overseas-pensions#chapter-2---taxation-of-payments-from-foreign-pension-schemes-or-annuities

Relevant section is approx half way down the page titled  "Changes to taxation of pension payments"

Am currently wading through it attempting to reduce it into everyday vernacular English.

Bill

Thanks Alan,

PM sent.

Hello,

Our shift delayed by ill elderly relatives, but still keen to better understand issues discussed in this thread.

I had the impression that significant changes took place in UK in 2016 regarding retirement funding.

Anybody know if those changes impacted upon the issues discussed in this thread ? Will do some googlng.

My current understanding is that its probably best to cash out all super prior to end of May in Australia and land in UK with a bank account (setting up that bank account is a different story) full of cash in Mid April thereby avoiding any possibility of HMRC making any claim on the money we have already paid tax on in Australia. It would then be necessary to sign up for the appropriate retirement funding products in UK.

Is there a list of forum sponsors somewhere where I can access contact details for accountants  / tax advisors / financial planners that are qualified to give co-ordinated advice relevant to both countries ? In my various discussions with these sorts of professionals its been very difficult to find a one stop shop, there is always the need for bringing in a second or third company because no single company can give me appropriate advice regarding best way to exit Australia and enter UK with retirement funds.

I now see that when buying a house in UK some real estate agents are asking you to prove that you are not a money launderer, and we have been warned by our bank (Westpac) that an international transfer  ie proceeds of sale of house + super cashouts,  can be delayed whilst people check that the money is "clean"   - Anybody ever had those issues ?

Bill

Aaaargh frustrating.

Ok Have sent query to HMRC pesnions section.

Thanks Marisa

Bill

.............. and here is the gloriously detailed response to my various questions that I sent to HMRC

Dear Sir,

Thank you for contacting the HMRC Residence Team.

You have not supplied HMRC with sufficient information to verify your identity, so we are only able to give you general advice and nothing specific to your personal circumstances.

The information that you require is covered under Form SA109. A hyper-link to this form is attached for your information and use:

https://www.gov.uk/government/publications/self-assessment-residence-remittance-basis-etc-sa109

I agree with what Marisa has said above, that is the position as I understand it after calling HMRC several times.

The only concession that is given is that you are taxed on 90% of a regular pension payment I mentioned the other reliefs that are implied in sa 106 but was told this did not apply as it would be an income stream( I was hoping when I posed the original question that someone else had tested this).

 

However as I am not in the position yet I haven't had to file a tax return to test it. So the option of a purchased life annuity is a possibilty this is also mentioned in the first link as it is regarded as capital and only the interest is taxed. It may be possible to buy one in Australia with higher yields. However as I stated before the exchange rate could vary the payment far more than tax or interest. Therefore bringing it to the UK as a lump sum could actually protect the value of capital if the AUD were to drop even further.

 

 

https://online.hmrc.gov.uk/information/help?helpcategory=selfAssessmentFiling1011&affinitygroup=&helpid=PensionsAndOtherBenefits

 

https://www.gov.uk/government/publications/self-assessment-foreign-sa106

Marisa and WInter1,

Thanks for the comments.

Everybody is different and has different circumstances.

Some people might take 1 lump sum once only when they retire

Our plan that works well in Australia calls for me to take annual lump sum withdrawal from a fund full of undeducted dollars instead of a regular pension.

From what I have learned on this forum so far this may not be as effective in UK for various reasons

The strategies outlined in this thread are interesting

http://www.pomsinoz.com/forum/financial-advice-ask-vista/165251-australian-age-pension-information-thread.html

Regards

Bill

Anybody know if the distinction between deducted and undeducted funds has any relevance to how the UK taxes the withdrawals ?

I have asked HMRC and am waiting for an answer but was wondering if someone had already had an answer.

Bill

Hello,

I've started making detailed inquiries to HMRC and DWP.

I found a couple of other sites and did some communication via online chat but they basically said "no we cannot help you"

These less useful sites were "The Pensions Advisory Service" and "Money Advice Service" . Money advice sent me to TPAS who then sent me to HMRC

To be blunt, the representatives of these two services didn't seem to know what services they did offer - the online officers were very reticent regarding why they existed and what topics they could give advice on. It was very frustrating.

Will post back what DWP and HMRC come back with.

I have! I'm curious how you got to 3.77 a week - I thought you hadn't worked in the UK at all? I just went through it as if I had never worked in the UK and my result was precisely 0.00.

Try filling out the calculator as if you were a male between 55 and 60 years old never worked in uk but have worked overseas.

do it several time changing the birth year every time.

you get different answers varying between zero and 11.74 per week and sometimes it gives you a couple of years of credits. Also works for a female.

If you look in the depths of the eligibilty link it appears that as a male approaches 65 years old he can automatically aquire NH credits simply by being resident and unemployed/low wage - I do not know what the logic is behind this, maybe I've misinterpreted it.

Also, in the notes at the bottom of the calculator page there seems to be automatic credit for between the ages of 16-19, again needs further investigation.

If you look at the printout below you see that this mythical chap that I invented automatically got 1 year's credits and I am assuming that the calculated pension is based on those credits plus the years overseas qualifies him.

I do know there was some weird and obscure rules about British pensions - if a female was the right age she can somehow "claim" a spouse on her pension or get a pension for him - am not sure of the details we were vaguely aware of this when we got the Sate pension for my wife but it didnt work in our circumstances so we didn’t investigate any further. That was a few years ago maybe those rules will change in April 2016

My conclusions have changed a bit and am thinking that people in our situation could work for a year or two on a low wage without hurting Centrelink pension too much. This might work for your situation as well with possibility of buying extra credits.

This calculator is only good for people retiring before April 2016 and probably works best for “vanilla” scenarios ie “Female aged 64 worked 40 years in UK” I’d say that our extreme fringe type scenarios could need substantial verification and checking and they may not be relevant as the rules change in April 2016.

I don’t know to what extent “sunset” and “grandfather” clauses will be implemented for current crop of baby boomers who have planned their retirement under current UK rules. There have been a few of these in Australian system recently

Regards

Bill

State Pension calculator

The State Pension will change on 6 April 2016. When you reach State Pension age you’ll claim the new State Pension. This is an estimate of your basic State Pension under the current rules.

[TABLE]

[TR]

[TH]Basic State Pension[/TH]

[TH]Your results[/TH]

[/TR]

[TR]

[TD]Your State Pension age[/TD]

[TD]66 years[/TD]

[/TR]

[TR]

[TD]When you’ll reach State Pension age[/TD]

[TD]16 May 2023[/TD]

[/TR]

[TR]

[TD]How much per week you may get[/TD]

[TD]£3.77[/TD]

[/TR]

[/TABLE]

You may not qualify for the new State Pension. Under the new State Pension rules you need at least 10 years of National Insurance contributions.

Check if the time you lived or worked overseas can help you meet the 10 years you need.

The State Pension age is regularly reviewed and may change in the future.

This estimate doesn’t include any Additional State Pension you may have before 6 April 2016. It may change if you make more National Insurance contributions before you reach State Pension age.

How much State Pension you get depends on how many years of National Insurance contributions you have.

[TABLE]

[TR]

[TH]National Insurance[/TH]

[TH]Your results[/TH]

[/TR]

[TR]

[TD]Years of contributions you already have[/TD]

[TD]1[/TD]

[/TR]

[TR]

[TD]Years you can still make contributions[/TD]

[TD]9[/TD]

[/TR]

[/TABLE]

Get a pension statement

Find out how you can get a State Pension statement to get an estimate of your full State Pension.

More about the State Pension

Read about:

• the new State Pension

• voluntary contributions

• increasing your basic State Pension with your partner’s (or late or former partner’s) National Insurance contributions

• State Pension if you retire abroad

Your estimate may include up to 3 years of automatic credits for the years containing your 16th, 17th and 18th birthdays. If you got your National Insurance number after April 2010 you don’t get these automatic credits.

Previous answers

Start again [TABLE]

[TR=class: section]

[TD=class: previous-question-title]What would you like to calculate?[/TD]

[TD=class: previous-question-body] Amount - estimate of your basic State Pension amount[/TD]

[TD=class: link-right] Change answer to "What would you like to calculate?" [/TD]

[/TR]

[TR=class: section]

[TD=class: previous-question-title]Are you a man or a woman?[/TD]

[TD=class: previous-question-body] Man[/TD]

[TD=class: link-right] Change answer to "Are you a man or a woman?" [/TD]

[/TR]

[TR=class: section]

[TD=class: previous-question-title]What is your date of birth?[/TD]

[TD=class: previous-question-body] 16 May 1957[/TD]

[TD=class: link-right] Change answer to "What is your date of birth?" [/TD]

[/TR]

[TR=class: section]

[TD=class: previous-question-title]How many years have you worked and paid National Insurance contributions from the age of 19?[/TD]

[TD=class: previous-question-body] 0[/TD]

[TD=class: link-right] Change answer to "How many years have you worked and paid National Insurance contributions from the age of 19?" [/TD]

[/TR]

[TR=class: section]

[TD=class: previous-question-title]How many years from the age of 19 have you claimed unemployment, sickness or disability benefits?[/TD]

[TD=class: previous-question-body] 0[/TD]

[TD=class: link-right] Change answer to "How many years from the age of 19 have you claimed unemployment, sickness or disability benefits?" [/TD]

[/TR]

[TR=class: section]

[TD=class: previous-question-title]Have you ever claimed Child Benefit, cared for someone sick or disabled or worked as a registered foster carer?[/TD]

[TD=class: previous-question-body] No[/TD]

[TD=class: link-right] Change answer to "Have you ever claimed Child Benefit, cared for someone sick or disabled or worked as a registered foster carer?" [/TD]

[/TR]

[TR=class: section]

[TD=class: previous-question-title]How many years between age 16 and 19 were you working and paying National Insurance Contributions, or receiving National Insurance credits?[/TD]

[TD=class: previous-question-body] 0[/TD]

[TD=class: link-right] Change answer to "How many years between age 16 and 19 were you working and paying National Insurance Contributions, or receiving National Insurance credits?" [/TD]

[/TR]

[TR=class: section]

[TD=class: previous-question-title]Have you lived or worked outside the UK?[/TD]

[TD=class: previous-question-body] Yes[/TD]

[TD=class: link-right] Change answer to "Have you lived or worked outside the UK?" [/TD]

[/TR]

[/TABLE]

Last updated: 19 January 2015

 

I can understand your concern if working would jeopardise your wife's Centrelink pension: but has the financial planner considered your pension situation? You've said you are in your fifties, so you will not be able to claim the Australian pension, and if you don't work in the UK for a year or two, you won't be able to claim the UK pension either. That's a lot of money to forego.

Basically the plan changed recently, hence my presence on these various forums, and current planner advised us yesterday that the move to UK is beyond their skills and experience.

It worth looking in all the nooks and crannies of the eligibilty site I posted earlier

and its worth playing with this https://www.gov.uk/calculate-state-pension - quite strange - if I do nothing I still get 3.77 a week !

Bill

No they wouldn't, unless their partner is older and is already in receipt of the Australian Centrelink pension BEFORE they leave the country.

.

Yes you are correct that is precisely our situation. All relevant pensions have been in place for a few years now so if I work in UK it threatens centrelink pension for my wife. But it was worth a look. The paperwork and documentation required for centrelink was astonishing and our accountant told us that he thinks some of his clients were too intimidated by the process and gave up even though they were entitled.

I have greatly appreciated the information available on this thread it has been very useful and helpful, thankyou.

The mantra of most financial planners I have spoken to is that everybodies situation is unique/different and you cannot assume that what works in one case will be applicable in another case.

All the various ways of getting credits for the pension are Listed in the depths of the uk govt website there could be some variations that apply to all sorts of different personal scenarios could be worth a detailed trawl through for anybody considering shifting back. Start here (https://www.gov.uk/national-insurance-credits/eligibility) and trawl through all links that might be relevant to your own situation.

Bill

Thanks for the tips and links about possibly working for UK pension. Very interesting. Anybody considering this would have to consider whether or not it jeopordises (spelloing ?) a partners Australian centrelink pension.

Is it possible to simply purchase a UK pension similar to purchasing a commercial product ? I know back payments are possible. Not sure if it would be worthwhile or competitive with other products, or why I might want to, simply dont know enough yet. Am scouring the gov.uk website for more info this afternoon.

All good questions for the Fin Planner and the tax accountants in UK when I go back this year.

Bill

Thanks for the reply Marisa -

There ought to be a mugs guide to all this stuff .............. but I suppose we are the ones writing it.

I have found these web sites that could be useful

Google this phrase "reciprocal pension UK Australia 2001 site:www.pomsinoz.com" to get a list of previous relevant threads in this forum

This Australian site is of interest and has a list of relevant UK web sites on the bottom of the page

http://www.humanservices.gov.au/customer/enablers/centrelink/international-social-security-agreements/countries-that-have-agreements-with-australia

This organisation http://youle.info/bpia-blog/ was given a strong reference in another thread and is said to have helped people going in both directions, seems to have a strong focus on the frozen pensions.

This organisation https://groups.yahoo.com/neo/groups/bapaemail/conversations/messages also seems to be focussed on the frozen British pensions.

Bill

Bill,

 

(remember that time worked in Australia up until July 2001 when the reciprical agreement ended. It could give you an entitlement to the non means tested pension if you have already had a number of years working and paying national insurance in the UK or maybe if you work in the UK till the day you retire. You only get the estimate for this when you reach retirement age. This could be a plus that will give a net gain on the whole deal.

 

Good luck

Winter

Hey Winter,

This is intriguing ................. I have never worked in UK ............... but maybe I might find something in future .............. and then my years of working and paying tax in Australia are somehow counted ? Sounds far too good to be true, but would sweeten up paying tax on my Aussie super . ................. I am not eligible for Aussie pension yet so havent applied am simply 55+ and able to withdraw the odd bit of money now and then as we need it ........... Our financial plan was put together by lots of consulting with Financial Planner and also the Financial Services Officer (FSO) at Centrelink.

The FSO was particularly helpful - he doesnt give advice, not allowed to - his job is to help people understand what the rules are and what information is relevant to your situation that you need to digest before making any decisions - I'd recommend that everyone gets an appointment with the FSO to find out various issues to consider prior to retirement.

What are the key terms that I need to do some searching on to find out more about this possible eligibilty please ?

<EDITED> Have just done some googling on reciprocal pension UK Australia 2001 and got some interesting results - worth the effort to Google this, brings up other threads on this forum that are worth a look as well as other stuff.

Bill

Am beginning to think I may have over reacted to this issue.

In UK you each get 10,000 pounds tax free then the money you earn on top of that is taxed at 20% ?

So if you budget to live on 30,000 per year thats 15,000 each

So that is tax of 20% on 5000 pounds that is 1,000 pounds tax each.

In my overall big picture that is a relatively cheap price to pay for being able to live where I want, and, for us, that means getting away from what has become an annual bushfire worry - we spent approx $1000-$1500 per year for the last few years when we flit to a caravan park on the extreme fire danger days - "Leave and Live" - well worth it for the peace of mind. For the other 10 months of the year our place is a paradise, but it takes a lot of energy that I no longer have to look after it.

So maybe everyone could have a look at their own big picture spreadsheet and see if the "TAX !!!! HORROR SHOCK NO WAY WILL I PAY TAX !!!!!!! " reaction is warranted, and are you depriving yourself of something you'd enjoy for the sake of tax minimisation.

I know it can become a bit of a passion to minimise tax, but the danger becomes that I spend my retirement minimising tax instead of enjoying myself as much as I possibly can before pegging out with my last 5 cents in the bank, and yes you have to do some planning to achieve that and it does involve attention to taxes.

I will always remember one financial planner recommending planning on spending up and enjoying your early retirement before your "Deep old age" - wonderful turn of phrase.

Maybe I've got this all wrong ? Are there other implications ie will UK try to make me pay tax on the earnings of my funds rather than on the withdrawals ? We dont have SMSF we are self funded retirees using industry funds to hold our retirement money.

Must admit I've gone back to being willing to pay 2000 pounds per year to live in a cooler climate as long as I've understood it properly. In my big picture spreadsheet that cost is offset by other costs I won't have to pay any more. But everyone has their own scenario to model and for some the costs may not balance out.

Leaving funds in Aussie super does bring up other issues - ie 20-40 years of the following : currency exchange risks, double the legislative risk with 2 governments involved, transfer costs, management & communication between Britain & Aus. any others ?

Will be talking to British tax accountants in May when we go back for holiday, and will post back whatever I learn.

Bill

Andrew,

Would you or one of your colleagues be able to make any comments on this thread please ?

http://www.pomsinoz.com/forum/moving-back-uk/174276-australian-super-taxed-uk-5.html#post1936673999

There are a number of us who have Australian Superannuation and are puzzled about how it could be taxed if we repatriate.

There seems to be lots of readily available information on the net for people coming out from Britain but relatively little for people going back with Aussie super funds.

Regards

Bill

Hello,

I started another similar thread on this topic, here http://britishexpats.com/forum/moving-back-uk-61/australian-superannuation-treatment-uk-850849/#post11536489, and have had a useful response with some good links in it.

Worth a look.

Bill

I have just about driven myself crazy working out all the permutations of this! I did get a recommendation for a financial adviser here, rang him and he told me I needed a tax accountant instead, so bear that in mind. However he did answer a lot of my questions.

 

 

<snippped>

 

.

Hello,

You can use a good search function to find British Tax Accountants who specialise in international personal tax here

http://www.tax.org.uk/ this is the home page

http://www.tax.org.uk/about_the_ciot use the search function 2nd option down in green box on the left one of the keys you can search on is international personal tax

Maybe we can persuade one of them to post some info for us

Bill

I believe if you come back to Australia and live for a year prior to reaching Aus pension age you can claim your Aus Gov pension if you're eligible for one and take it back to the UK.

Hello,

Residence requirements are summarised here

https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/age-pension

Pasted below

[h=3]Residence Requirements[/h] To qualify for the Age Pension you must be an Australian resident (that is, living in Australia on a permanent basis) and in Australia on the day the claim is lodged, and must also satisfy one of the following:

• be an Australian resident for a total of at least 10 years, with at least five of these years in one period; or

• have a qualifying residence exemption; or

• be a woman who is widowed in Australia when both she and her late partner were Australian residents, and who has 104 weeks residence immediately before the claim; or

• be receiving Widow B Pension, Widow Allowance or Partner Allowance immediately before reaching pension age.

Special rules apply to residence in countries with which Australia has an International Social Security Agreement. Residence in these countries may count towards the minimum 10-year residence requirement.

You also have to be resident and in Australia on the day you apply for it.

Bill

Hello,

Last post was over 12 months ago.

I've just started thinking about this issue - any new developments / thoughts / recommended web pages / recommended advisors etc. etc. etc. during the last 12 months ?

Bill