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ClareU posted a topic in Financial Advice: Ask VistaHI, I am hoping someone can please give me some guidance and answer a few questions regarding taking a lump sum in the UK and declaring the tax in the UK and AU. I am a duel British/Australian citizen living in Australia since 2002. Having turned 60 I have a UK PP in the amount of 18,000 GBP to access. The money is only available as a lump sum or as an annuity so I want to take the full amount. I know that the first 25% of the value of the fund is tax free so I should receive 4,500 before being taxed. I am told that the remaining 75% will be taxed at 40% so that would leave me with an additional 8,100 GBP. I am assuming I declare this amount but converted in AU $ on my tax return, so around $22,000. My first question is: can I deduct from this, the amount that was in the fund before I became resident in Australia? My next questions are: Once I receive the funds, do I apply to HMRC for a tax rebate on the basis that I should have been taxed on a lower income threshold? And also, if I then receive a rebate do I also declare that on my Australian tax return? Finally, can I offset all the tax I end up paying in the UK? I have not earned an income either here or in the UK for the last couple of years. Hope this is laid out clearly enough to make sense, I am finding it pretty confusing! Many thanks for any assistance you can provide!
I thought I'd have a bit of a rant, and then divert into a question. I've engaged accountants a couple of times regarding our moves to and from Australia and the UK. We generally engage on the basis of helping us with our tax return, although I've also asked for tax advice and planning as well. What I've found, is that those I've engaged have been very happy to offer bookkeeping and filing, but less forthcoming on advice or tax efficiency. A great example is my current predicament, where I engaged a medium-sized reputable AU-UK-NZ accountant for advice on liability on moving back to the UK, and then for helping with the CGT liability of selling our long-held family house in the UK once we moved back into it. This accountancy helped me work through a few scenarios of what our tax liability would be in Australia on whether we sold up in the UK, or moved back on a sabbatical, or moved back permanently. We made a decision to move back for a few years, informed by that advice. Now that we're back, we asked them to help calculate the CGT due on the sale of our primary home; a home I didn't sell while we were away, as I didn't want to get into the complications of multiple home ownership and all the CGT issues that it would entail. They did so, and told us we would have a UK tax liability of around 2.5% of the house value, based on all the various PRR calculations, time in vs away, shared ownership, etc. I asked them whether changing the ownership balance to equal with my wife (who's not working) might reduce the CGT liability, and they went away and calculated that it would save around 0.3% - which is still a good few nice meals out! It was something we had intended doing anyway (so not purely for tax reasons), so we did that before selling. I then did a bit more reading, and came back to ask them whether we might be exempt from CGT entirely, since we had moved to AU for work, and come back after I was made redundant from that job. They replied quoting TCGA92/S223, and said that yes, probably, it seems like I could be exempt. So why didn't they bloody tell me? When I came to them for advice whilst still in Australia, why didn't they inform me that if I took the scenario of moving back to the UK into my primary family home, I might be able to negate the issue of CGT in both AU and the UK? And then when I engaged them again when back in the UK, why didn't they even think to ask whether I met the conditions that might qualify for full relief - or, of course, suggest that, since they had all that information from the previous engagement? Of course, I'm not asking here for help on this specific issue, but there is a more general question behind it. How do I engage an accountant to represent my interests, rather than as a simple bookkeeper? I have a friend from the US who has the even more tricky situation of being taxed at home on his worldwide gains, and when I asked how he managed it, he said he had a 'good accountant' who helped him mitigate the liability. That's what I'm looking for, but how do I find it? Is it a question of asking for "tax planning" rather than expecting it as part of the tax return, and paying for that service. Is it that it's only high-net-worth individuals and small businesses who can get that kind of service? Or is it just a question of finding "the right accountant"? I'm planning to come back next year and am currently planning for that, so I'd appreciate any inputs as to how everyone else manages it! Thanks, D