retiring back to the UK!

[Zack]

I know how you feel, we're still trying to work our way through it.

 

I'd love to know what you've found out so far. This is what we think we know:

 

If you have any investment income in Australia, it will be taxed BY AUSTRALIA exactly as it is now, with one vitally important difference - as a non-resident, you won't have any tax-free threshold. You'll be taxed on every cent of income it earns. That means paying tax on an extra $18,200, which will be a fair whack.

 

You won't be taxed by the UK though. Of course, if you pay the income into a UK bank account and the bank account earns interest, you'll pay tax on the interest. That would be exactly the same if you stayed in Oz and paid it into an Australian bank account, wouldn't it?

 

Your only sensible option is to sell the shares - but do it while you're still resident in Oz, because once you become a non-resident you have to pay tax on 100% of capital gains, not 50%. Again, that's charged by the Australian tax office, not the UK.

 

Now, state pensions. Why don't you have access to UK or Oz pensions? As I understand it, the UK pension isn't means-tested and if you ever worked in the UK, you're probably entitled to something. It may not be much, but you can buy extra years, which can make a big difference. Worth doing, because even though you think you don't need it now, it will give you a safety net for later years. Go to https://www.gov.uk/state-pension/what-youll-get

 

As for Oz pensions - yes there's a catch. Even if your income/assets are low enough to claim, you can't claim the Australian pension from the UK. You can claim if you're resident in some European countries but not the UK (yes I know, unfair). The only way to get the Aussie pension is to come back to Australia when you're ready to claim - i.e. after you turn 65 - and stay for a full year. That's unlikely to be practical!

 

One thing to consider is cost of living. We live in Sydney which means we had nearly all our money tied up in our home - and it wasn't that big, so no scope to downsize (we're currently renting while we finalise our plans). We will take a tax hit if we move - but if our housing costs are cheaper, then we'll still be better off. Based on our internet searches, it looks as though that would be the case - but we all know how misleading real estate ads can be, so we're not counting on it.

 

Currently we're taking it one step at a time. We're going initially for an extended holiday. We'll leave most of our stuff here in storage, and live in rented accommodation (which is usually furnished in the UK). If we decide it adds up financially, we'll come back, pack up our things and make the move. If the sums don't add up, we'll come back after two years. Why two years? There's a handy calculator on the ATO website which lets you work out whether or not you're resident for tax purposes.

 

http://www.ato.gov.au/Calculators-and-tools/Are-you-a-resident/

 

There are lots of possible permutations but basically, we can be abroad for up to two years and still be treated as resident in Australia, provided we're not settled at a permanent address. That means we go on paying Australian tax exactly as we do today, and we're not liable for UK tax. It does mean we'll have to keep moving around - but if we decide we can't stay permanently, then we'll want to make the most of our limited time by doing lots of travelling, anyway.

 

A couple of points i'd like to add to your post.Interest in the banks in the Uk is realy not worth bothering about.They advertise 5% like Nationwide but it's only for a max of £2500 in a current account.Others like the top 4 advertise 2.5% but thats for savings bonds for 24months.and you have to deposit £500 to £1000 per month just to open the account.Unlike Australia you can open a term depost for whatever length of time,and whatever amount you want to save.In the uk you can't do that.

Uk aged pensions are the lowest in the developed world.We recieve £7500 p/a thats because we have money in the bank and can't claim Credits.The Basic Pension in Australia for a couple is $30,000+And they recieve percentages off every utillity bill, and a bigger reduction on car rego.Nothing of that sort in the UK.You get Taxed on everything..As far as not being able to get your Australian pension.You do.Depending on how long you have lived and worked in Australia.And of cousre if you have been claiming a pension while liveing there,i lived and worked in Australia for 27 years so i recieve 64% of my Aussie aged pension.It's got nothing to do with agreements between the UK and Australia.It's a fare go for all,thats what centre link told me.It's what Australia does. Going back to Australia if things don't work out, you don't have to wait 12 months.I contacted Centre link,as we are returning,and they told me to let them know at least 1 month,before we return,so our pensions will be paid into our bank account still left open in Ausatralia.Whats that like for a realy decent Country?It Looks after it's people.Unlike the present Tory Government,it hates it's own,and pays billions out overseas,and cuts the most needy to the bone.I must admit it's a shocker here in the UK.The only things left are the great hearted people and the most beautiful countryside,It is a shame.British politicians have ruined it .The Tories should never have got us into the EU.

Renting in the Uk is exspensive,very very expensive,thats why we bought a house.Car Insurance is a shocker,Council Tax a shocker,utillity bills,and water was my biggest shock,£77 for 28 days supply.It's calculated on what band of council tax you are on.I quickly had a water meter put in.It has to be paid by the tennant,and you have to sign a lease for 6 months.A bit of a rant. but thats how it is.Good Luck To ALL thinking of making the move!!!!!!!!!

[Marisawright]

Interest in the banks in the Uk is realy not worth bothering about.

Interest in Australia is dropping too. We've got term deposits that are only paying 4% now, and it was hard work to find those!

Uk aged pensions are the lowest in the developed world.

I know it's not much. However if the OP are entitled to it, it's always an extra cushion.

 

As far as not being able to get your Australian pension.You do.

. Yes, IF you were already getting the pension before you left Australia. If you leave before you reach pension age, you have to go back to Australia to get it.

 

Going back to Australia if things don't work out, you don't have to wait 12 months.

I didn't say you did. You'll get the pension the day you claim it, BUT then you have to stay in Australia for a year, otherwise they'll cancel it again.

 

Renting in the Uk is exspensive,very very expensive

That's interesting, because they don't look that bad on the internet (I've been looking at Bristol). What kind of money are we talking about? Bear in mind I live in Sydney and currently pay $500 a week for a shoebox.

 

As for politics - I wonder if the British lot are much worse than the ones we've got in now. They're talking about raising the pension age to 70 and stopping people taking their superannuation as a lump sum.

[Parley]

Can you get the Age Pension in the UK if you never worked there but are a British citizen ?

[NickyNook]

Can you get the Age Pension in the UK if you never worked there but are a British citizen ?

 

You need to have paid NI contributions for a number of years before you get anything.

 

I think the minimum is currently 5 years payments but it's changing to 10 years minimum payments in a few years as part of the pensions overhaul.

[jasepom]

Why give yourself all that stress why not retire somewhere nice in Australia. So much warmer too.

[Marisawright]

 

Why give yourself all that stress why not retire somewhere nice in Australia. So much warmer too.

And what's good about being warm? I've never really liked hot weather, especially when it's humid, and as I get older I'm getting worse. My husband has had a basal carcinoma removed from his face and is now paranoid about going out in the sun (yes, I know that's an over-reaction, but I can't make him see otherwise). So if I stay in Australia, I'm looking at a life stuck in the house with the air conditioning on - unless I move to Tassie. However we're city people and we like our restaurants, social dancing, shows etc and Hobart is just too quiet for us. I'm not leaving because I hate Australia and the OP isn't saying that either. Circumstances change. People change.

[ramot]

You can't compare Bristol rental prices to Sydney. You could compare London prices however, that would be a fairer comparasant.

as a retiree from UK living on the Sunshine Coast yes it is warm and humid for 3 months's of the year, but we aren't stuck in the house, as most other retires we know in both countries irrespective of the weather, be it winter in UK theoretically stuck indoors with the central heating on, most of us are out an about enjoying our lives, enjoying our hobbies or interest, not many if any of our friends have much of a tan, as we are too busy to sun bathe.

you could and should hopefully enjoy retirement in either country, but we do get more money off bills etc here than UK.

one other point, reference tax in UK if you were to be taxed there wouldn't you be eligible to the tax free threshold? if you are that might help with finances.

enjoy your retirement where ever you end up, we have the best time.

[Marisawright]

Can you get the Age Pension in the UK if you never worked there but are a British citizen ?

 

If you didn't pay National Insurance Contributions for at least 3 years, then no you can't get the UK age pension at all. You can collect your Australian pension there, but you have to be in Australia when you reach pension age to claim it.

[Marisawright]

You can't compare Bristol rental prices to Sydney. You could compare London prices however, that would be a fairer comparasant.

as a retiree from UK living on the Sunshine Coast yes it is warm and humid for 3 months's of the year, but we aren't stuck in the house, as most other retires we know in both countries irrespective of the weather, be it winter in UK theoretically stuck indoors with the central heating on, most of us are out an about enjoying our lives.

 

Thanks, that's pretty much what I thought - so by moving to Bristol, we'd save a lot of money on rent, which would compensate for some of the extra costs of living in the UK.

 

I wish my husband would go out and about and enjoy life, but as I said, since his cancer he won't go out in the sun between 10am and 3pm. In most of Australia, it's sunny at that time even in winter. That's very limiting - we haven't had a day out anywhere outdoors since last June. That won't be a problem in the UK because even in summer, the UV index is much lower (it's to do with the tilt of the earth) so I'm hoping we'll be able to get back to a normal life.

 

When it's humid, I get dreadful hot flushes which last all day (they never stopped after menopause). Apart from being uncomfortable, it's not a good look to walk around with sweat dripping off your nose! So I won't be sorry to get away from the hot weather either.

[londonpaul]

That's interesting, because they don't look that bad on the internet (I've been looking at Bristol). What kind of money are we talking about? Bear in mind I live in Sydney and currently pay $500 a week for a shoebox.

 

In London I pay £250 ($500) a week for a bedsit.

[Guest]

Why give yourself all that stress why not retire somewhere nice in Australia. So much warmer too.

 

We get it that you love Australia and can't understand why your wife and kids didn't share your passion for it, but you've got to move on. You're here, they're there. Why question the motives of folks who've been here a while as to why they're moving on?. Times change, priorities shift. The things that wet your whistle about this country don't do it for everyone. Sometimes Australia works great for a person and then they need something else.

[pablo]

We get it that you love Australia and can't understand why your wife and kids didn't share your passion for it, but you've got to move on. You're here, they're there. Why question the motives of folks who've been here a while as to why they're moving on?. Times change, priorities shift. The things that wet your whistle about this country don't do it for everyone. Sometimes Australia works great for a person and then they need something else.

 

I'll never understand why some cant just accept that people prefer different places,instead of just being happy that "they" like it where "they" are,it's like they're missionaries trying to convert people to their way of thinking,and for the life of me i cant understand it!,is it blind arrogance that "they" are right,do they need everyone to come round to their way of thinking as some kind of reassurance?,honestly baffles me,anyway,hope life's treating you as well as can be my Scouse bro

[ramot]

I'll never understand why some cant just accept that people prefer different places,instead of just being happy that "they" like it where "they" are,it's like they're missionaries trying to convert people to their way of thinking,and for the life of me i cant understand it!,is it blind arrogance that "they" are right,do they need everyone to come round to their way of thinking as some kind of reassurance?,honestly baffles me,anyway,hope life's treating you as well as can be my Scouse bro

 

I agree totally with you Pablo. I shrug my shoulders in despair at the way some posters never stop posting that because either UK or Oz wasn't for them we have to put up with them constantly going on about it. Some times I wonder if they protest too much, are they trying to convince themselves!!?

no one place suits all, there is good and bad every where, I speak from experience having lived in 5 countries.

[Guest]

I'll never understand why some cant just accept that people prefer different places,instead of just being happy that "they" like it where "they" are,it's like they're missionaries trying to convert people to their way of thinking,and for the life of me i cant understand it!,is it blind arrogance that "they" are right,do they need everyone to come round to their way of thinking as some kind of reassurance?,honestly baffles me,anyway,hope life's treating you as well as can be my Scouse bro

 

 

I'm good thanks Pabs, just very nervous about the next four games!.

 

 

Your 'missionaries' analogy is very apt. I've been here five and a half years now, and I've met loads of Brits who've been incredulous that I don't like it much and labour the point about how great they think it is here and how you'd never catch them going back to Britain. I wonder if Brits who've emigrated to other countries do the same?. Surely it can't be insecurity about the choice they've made that makes them try and convert 'non-believers' like me to their way of thinking?. From my experience it just makes me dig my heels in and say "I'll make my own bloody mind up thanks!"

 

I'm pretty pragmatic about being in Australia nowadays to be honest. As a Social Worker whose other half is a Psychologist, the government cuts back home have impacted upon our earning ability there. At the moment we're both working and our daughter is very happy and settled here, so it's a case of 'if it aint broke, don't fix it.' But, if the Australian government makes the same sort of cuts to the public sector here, then it'd be a case of weighing up which country offers us stability and the chance to earn a living.

[Zack]

Just Don't realy understand what you are trying to achieve by contacting A tax expert in Oz about Tax in the UK.After 27 years in Oz and retired.We just informed centrelink we were moveing.Bought our tickets and went.On arrival i phoned the DWP in England and told them what date we arrived back in the UK,and they sorted it all out,and advised us that the money we recieve from Australia may be Taxed,They have just raised the tax threshold in the UK to £10750 each Depending on your age.Now we are selling the house we bought and coming back to Australia.Anyone comeing back to the UK over 70 or there abouts.Is going to be in for a huge big shock.Britain as we knew it,has gone forever.We left in the 70's as Thatcher Started to Destroy British Industries ,and it has never recovered.London suburbs,Towns Throughout the Midlands are Overun with Forigners.Dressed from head to toe in Black.Schools are filled with their offspring.Parts of the UK are worse off than places in Poland The Tories have once again looked after the wealthy,that have doubled their wealth in the last 4 years.The only thing the British Politicains haven't ruined is the Countryside.But it's on their agenda Tories want to start building on the green belt.Age discrimination in The UK is a disgrace.Over 70 you can't hire a car,Car insurance is 3 times the norm.Good luck anyhow.But it's back to the Lucky country for us.

[Gbye grey sky]

Just Don't realy understand what you are trying to achieve by contacting A tax expert in Oz about Tax in the UK.After 27 years in Oz and retired.We just informed centrelink we were moveing.Bought our tickets and went.On arrival i phoned the DWP in England and told them what date we arrived back in the UK,and they sorted it all out,and advised us that the money we recieve from Australia may be Taxed,They have just raised the tax threshold in the UK to £10750 each Depending on your age.Now we are selling the house we bought and coming back to Australia.Anyone comeing back to the UK over 70 or there abouts.Is going to be in for a huge big shock.Britain as we knew it,has gone forever.We left in the 70's as Thatcher Started to Destroy British Industries ,and it has never recovered.London suburbs,Towns Throughout the Midlands are Overun with Forigners.Dressed from head to toe in Black.Schools are filled with their offspring.Parts of the UK are worse off than places in Poland The Tories have once again looked after the wealthy,that have doubled their wealth in the last 4 years.The only thing the British Politicains haven't ruined is the Countryside.But it's on their agenda Tories want to start building on the green belt.Age discrimination in The UK is a disgrace.Over 70 you can't hire a car,Car insurance is 3 times the norm.Good luck anyhow.But it's back to the Lucky country for us.

 

Yes, age discrimination is rife in the UK. Free public transport and prescriptions, concessions on almost everything, winter fuel allowance, guaranteed pension increases. Some one-eyed generalisations here. What evidence do you have that car insurance trebles when you are 70? First I've heard.

[patsmb]

Bit of info on Centrelink pensions in that as from July 1st 2014 the eligiblity for claiming will be 35 years working life -it is now 25 years

Working life being classed on how long you have been in Australia between the age of 16 & 65 ( or retirment age )

We came home to the UK in December 2013 ,i get full Centrelink Pension hubby 85% because of his age when we emigrated

Our UK pensions which we were claiming while we were in Oz did rise a tad when we returned to live in the UK

DWP did send forms asking us about our Aussie pensions because seemingly if you dont get a Centrelink pension the UK could possibly pay you full UK pension based on your working life in Australia

( That though was our status as we emigrated to the UK in 1982 the canceling of the reciprocal agreement in 2002 changed some immigrants status though)

The Centrelink letter we received recently does state we will continue to get our pensions at the current rates as we are allready outside of Australia

However it also states if we go back to Australia and stay more than 26 weeks then the rates would drop to the new rates

Another pointer is that you must be in in Australia to claim the Centrelink pension or you dont get it !

Its a point to look at for anyone thinking of leaving Australia with a Centrelink pension as if the move is not made before July 1st the pension rate could drop dramatically

[tea4too]

Just Don't realy understand what you are trying to achieve by contacting A tax expert in Oz about Tax in the UK.After 27 years in Oz and retired.We just informed centrelink we were moveing.Bought our tickets and went.On arrival i phoned the DWP in England and told them what date we arrived back in the UK,and they sorted it all out,and advised us that the money we recieve from Australia may be Taxed,They have just raised the tax threshold in the UK to £10750 each Depending on your age.Now we are selling the house we bought and coming back to Australia.Anyone comeing back to the UK over 70 or there abouts.Is going to be in for a huge big shock.Britain as we knew it,has gone forever.We left in the 70's as Thatcher Started to Destroy British Industries ,and it has never recovered.London suburbs,Towns Throughout the Midlands are Overun with Forigners.Dressed from head to toe in Black.Schools are filled with their offspring.Parts of the UK are worse off than places in Poland The Tories have once again looked after the wealthy,that have doubled their wealth in the last 4 years.The only thing the British Politicains haven't ruined is the Countryside.But it's on their agenda Tories want to start building on the green belt.Age discrimination in The UK is a disgrace.Over 70 you can't hire a car,Car insurance is 3 times the norm.Good luck anyhow.But it's back to the Lucky country for us.

 

Zack, while I don’t share your views about life in the UK I have some sympathy with your unhappiness as I remember your posts while in Aus, how much you resented the years you had spent there and how desperate you were to leave. Having invested all that emotion and determination in a move back to the UK, I guess it must be very unsettling to discover that life in Britain is not how you remember it, or how you would like it to be. But the country you currently seem to dislike so much spends nearly 50% of its welfare bill on pensions, plus all the things described in @Gbye grey sky's post. If you haven’t discovered this website yet, check out Age UK “the country's largest charity dedicated to helping everyone make the most of later life”. http://www.ageuk.org.uk/about-us/local-partners/

 

To be honest, I’m not sure the UK could ever have met your 27 years of absent expectations, but at least you now know where your heart lies, so good luck with your return. Tx

[Guest]

I think it's strange that if you've saved all your life and put into superannuation that you wouldn't want to use it in Australia. That's what it's for after all.

It's their money to do what they want with it. Just because they saved it in Australia doesn't mean they have to spend it there. Besides some of us do actually like the U.K. Some of us didn't move to Australia to escape the U.K. Some of us would like to return to our birth country nothing wrong with that.!!!!

[Keith and Linda]

It's their money to do what they want with it. Just because they saved it in Australia doesn't mean they have to spend it there. Besides some of us do actually like the U.K. Some of us didn't move to Australia to escape the U.K. Some of us would like to return to our birth country nothing wrong with that.!!!!

 

Too true, also they could well have brought money into Australia to begin with, and if they have super and worked then they have paid their dues in taxes.

[Guest]

Agree whole heartedly. Really gets up my nose when people just can't get that Australia is not for everyone. Some do not settle, some do for a while and others well they just want to return to their roots. Doesn't automatically mean we (those that return or want to) don't like Australia. we just want something else is all.

[Keith and Linda]

I think it's called 'living our life' and 'Our life choices'

[Marisawright]

Just Don't realy understand what you are trying to achieve by contacting A tax expert in Oz about Tax in the UK.After 27 years in Oz and retired.We just informed centrelink we were moveing.Bought our tickets and went.On arrival i phoned the DWP in England and told them what date we arrived back in the UK,and they sorted it all out,and advised us that the money we recieve from Australia may be Taxed,

 

That's the reason, Zack. If you leave Australia but you keep investments here, you'll pay more Australian tax than if you'd stayed in Oz (a lot of people think that if you're no longer resident in Australia you don't pay Aussie tax - not true!). If you're wealthy, losing a bit of extra tax won't be an issue. If you're not, it's important to understand how that extra tax will impact your earnings.

 

To give you an example, I have an investment property in Darwin which is my main source of income. Right now, thanks to the tax-free threshold and some deductions, I pay no tax on the $23,000 rental. If I move to the UK, I'll be slugged 30% tax on it - by the Australian government, not the UK one. Needless to say, I can't afford to lose that much money. So it makes a lot of sense to understand the tax implications before you go.

[fizzybangs]

I know how you feel, we're still trying to work our way through it.

 

I'd love to know what you've found out so far. This is what we think we know:

 

If you have any investment income in Australia, it will be taxed BY AUSTRALIA exactly as it is now, with one vitally important difference - as a non-resident, you won't have any tax-free threshold. You'll be taxed on every cent of income it earns. That means paying tax on an extra $18,200, which will be a fair whack.

 

You won't be taxed by the UK though. Of course, if you pay the income into a UK bank account and the bank account earns interest, you'll pay tax on the interest. That would be exactly the same if you stayed in Oz and paid it into an Australian bank account, wouldn't it?

 

Your only sensible option is to sell the shares - but do it while you're still resident in Oz, because once you become a non-resident you have to pay tax on 100% of capital gains, not 50%. Again, that's charged by the Australian tax office, not the UK.

 

Now, state pensions. Why don't you have access to UK or Oz pensions? As I understand it, the UK pension isn't means-tested and if you ever worked in the UK, you're probably entitled to something. It may not be much, but you can buy extra years, which can make a big difference. Worth doing, because even though you think you don't need it now, it will give you a safety net for later years. Go to https://www.gov.uk/state-pension/what-youll-get

 

As for Oz pensions - yes there's a catch. Even if your income/assets are low enough to claim, you can't claim the Australian pension from the UK. You can claim if you're resident in some European countries but not the UK (yes I know, unfair). The only way to get the Aussie pension is to come back to Australia when you're ready to claim - i.e. after you turn 65 - and stay for a full year. That's unlikely to be practical!

 

One thing to consider is cost of living. We live in Sydney which means we had nearly all our money tied up in our home - and it wasn't that big, so no scope to downsize (we're currently renting while we finalise our plans). We will take a tax hit if we move - but if our housing costs are cheaper, then we'll still be better off. Based on our internet searches, it looks as though that would be the case - but we all know how misleading real estate ads can be, so we're not counting on it.

 

Currently we're taking it one step at a time. We're going initially for an extended holiday. We'll leave most of our stuff here in storage, and live in rented accommodation (which is usually furnished in the UK). If we decide it adds up financially, we'll come back, pack up our things and make the move. If the sums don't add up, we'll come back after two years. Why two years? There's a handy calculator on the ATO website which lets you work out whether or not you're resident for tax purposes.

 

http://www.ato.gov.au/Calculators-and-tools/Are-you-a-resident/

 

There are lots of possible permutations but basically, we can be abroad for up to two years and still be treated as resident in Australia, provided we're not settled at a permanent address. That means we go on paying Australian tax exactly as we do today, and we're not liable for UK tax. It does mean we'll have to keep moving around - but if we decide we can't stay permanently, then we'll want to make the most of our limited time by doing lots of travelling, anyway.

 

You need to be a resident in Australia for a full year before your retirement age. If you return AFTER retirement age as you suggested, you have to be a resident for two years. Info from CES researcher on my behalf who thought the rules unfair!

[patsmb]

You need to be a resident in Australia for a full year before your retirement age. If you return AFTER retirement age as you suggested, you have to be a resident for two years. Info from CES researcher on my behalf who thought the rules unfair!

Full UK pension can be paid by DWP if you do not get a full Centrelink pension ( you have to prove work history in Oz and it goes back before 2002 when the reciprocal agreement ended)

BUT in that respect the UK pension is means tested ie if you get part or full Centrelink pension you wont get full pension you will only get what you would 'normally ' get

We have just waded through numerous forms after coming back to the UK in late December 2013 We got a small increase in the UK pension because we are now resident again but as we get full Centrelink pensions we wont get full UK pensions If however anyone pays back NI contributions it ups the UK pension but you then loose off the Centrelink pension A minefield really !