Fisher1 Posted February 17, 2015 Share Posted February 17, 2015 Hi all I got involved in a discussion on a different forum yesterday, talking about my pet hobby horse, frozen pensions. Someone said that pensioners leaving the UK didn't have to pay any further tax on their state pension to the UK government, and that Australian pensioners don't pay tax in Australia at all. Surely this cant be right? :confused: Link to comment Share on other sites More sharing options...
Bobj Posted February 17, 2015 Share Posted February 17, 2015 Hi all I got involved in a discussion on a different forum yesterday, talking about my pet hobby horse, frozen pensions. Someone said that pensioners leaving the UK didn't have to pay any further tax on their state pension to the UK government, and that Australian pensioners don't pay tax in Australia at all. Surely this cant be right? :confused: Coming up to 16 years as a pensioner and only pay GST (purchase tax) No tax on bank and shares investments. Cheers, Bobj. Link to comment Share on other sites More sharing options...
Mike@Bonbeach Posted February 17, 2015 Share Posted February 17, 2015 Hi Fisher1 You certainly don't pay tax on the UK pensions to the UK Government but it is treated as income in Australia and so is liable for tax. I have 2 reasonable UK pensions and both are included in my tax assessment. Once we have been here 10 years we will be able to claim senior Australian offset which hopefully will mean we won't be liable for any tax. Mike Link to comment Share on other sites More sharing options...
Marisawright Posted February 17, 2015 Share Posted February 17, 2015 Coming up to 16 years as a pensioner and only pay GST (purchase tax) No tax on bank and shares investments. This is a bit misleading because it implies you don't have to bother with tax at all. Even pensioners have to submit a tax return and yes, you could be taxed on your UK pension IF you are earning over the tax-free threshold. However the tax-free threshold is quite high - over $18,000 - and you get extra concessions for being a senior, so in the end you might not be liable for any tax. If you are earning under the threshold and know for sure you won't be due to pay any tax, you can fill out a form saying you don't earn enough to be taxed - but if you do that and it's not true, there are big fines if you're found out. Link to comment Share on other sites More sharing options...
Fisher1 Posted February 17, 2015 Author Share Posted February 17, 2015 Thanks all for the replies. I'm quite surprised to know that you don't pay UK tax once you've left ... it sort of compensates a bit for the frozen pension thing. This is all academic for me at the mo but it pays to be properly informed I think :-) I reckon my OH and I would be paying tax on our pensions but am curious about the shares and bank interest? Link to comment Share on other sites More sharing options...
Bobj Posted February 18, 2015 Share Posted February 18, 2015 This is a bit misleading because it implies you don't have to bother with tax at all. Even pensioners have to submit a tax return and yes, you could be taxed on your UK pension IF you are earning over the tax-free threshold. However the tax-free threshold is quite high - over $18,000 - and you get extra concessions for being a senior, so in the end you might not be liable for any tax. If you are earning under the threshold and know for sure you won't be due to pay any tax, you can fill out a form saying you don't earn enough to be taxed - but if you do that and it's not true, there are big fines if you're found out. Not at all misleading. The OP stated, "and that Australian pensioners don't pay tax in Australia at all." 16 years and no tax...All my investments are tax free as I put all dividends back into the investments. Cheers, Bobj. Link to comment Share on other sites More sharing options...
PatW Posted February 18, 2015 Share Posted February 18, 2015 I've been searching gov.uk to see if we're eligible for UK pensions and have, frankly, been going round in circles. Am I right (from the reams of pages I looked at) that one has to have been working in UK for 35 years before one is eligible for a UK pension and living overseas? Link to comment Share on other sites More sharing options...
Fisher1 Posted February 18, 2015 Author Share Posted February 18, 2015 PatW I don't think so. I think you have to have paid in for a minimum of ten years and then you get paid a reduced pension based on the amount you have paid. What you need is a pension forecast ... we lived in Belgium for ten years and my OH contributed to the Belgian scheme. He has just finished ploughing through a pile of forms (in French!) and it seems he will get something not sure it will be much but hey, money's money. OH also had some years with the UK system and Ive just asked him about it. He said he rang them - a bit difficult from Australia I know. He said if you do ring, have your national insurance number handy because they base everything on that. It might be cheaper to write to them first. Good luck! Link to comment Share on other sites More sharing options...
Marisawright Posted February 18, 2015 Share Posted February 18, 2015 Not at all misleading. The OP stated, "and that Australian pensioners don't pay tax in Australia at all." 16 years and no tax...All my investments are tax free as I put all dividends back into the investments. What I mean is, the OP could've taken your post to mean Australian pensioners aren't liable for tax. That's not true. YOU don't pay tax because you've structured your affairs so you're not liable. If you weren't tax-aware -- or if you needed those dividends to live on -- then you would be liable for tax. Link to comment Share on other sites More sharing options...
Marisawright Posted February 18, 2015 Share Posted February 18, 2015 I've been searching gov.uk to see if we're eligible for UK pensions and have, frankly, been going round in circles. Am I right (from the reams of pages I looked at) that one has to have been working in UK for 35 years before one is eligible for a UK pension and living overseas? Not at all. Contact the Pensions Service and ask for a Pension Forecast and they will send you a letter detailing exactly what you'll get at pension age, and also tell you what you need to pay in back-payments if you'd like to increase it. https://www.gov.uk/government/publications/application-for-a-state-pension-statement You can claim the pension from Australia. Link to comment Share on other sites More sharing options...
PatW Posted February 19, 2015 Share Posted February 19, 2015 Hello Marisa & Fisher1 Thank you for your replies and useful information. I've downloaded the State Pension Statement form and will get that completed & mailed asap. Then we'll see. Oh dear, finding National Insurance numbers could be a problem, though! But thank you both again. It's much appreciated. Link to comment Share on other sites More sharing options...
Alan Collett Posted February 22, 2015 Share Posted February 22, 2015 Not at all misleading. The OP stated, "and that Australian pensioners don't pay tax in Australia at all." 16 years and no tax...All my investments are tax free as I put all dividends back into the investments. Cheers, Bobj. You are taking scrip dividends, Bobj? If so, you are sure such dividends are not assessable as income? Best regards. Link to comment Share on other sites More sharing options...
Marisawright Posted February 22, 2015 Share Posted February 22, 2015 You are taking scrip dividends, Bobj? If so, you are sure such dividends are not assessable as income?. The same thought occurred to me. The ATO site says "If you are having your dividends reinvested it is important to know that the income still needs to be included in your tax return, even if you did not physically receive it. As far as the tax man is concerned, you received a cash dividend and used it to buy more shares." So unless he's got some special type of investment I'm not sure how it works. Unless the shares are all inside a super fund. Link to comment Share on other sites More sharing options...
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