airham Posted June 17, 2015 Share Posted June 17, 2015 Can anyone clarify the ATO tax situation if I move permanently to the UK and become non-resident for tax purposes? If my Age Pension was paid into an Australian bank account is it taxed by the ATO? If my Age Pension was paid into a Foreign bank account (by Centrelink) is it taxed by the ATO? Any info would be VERY much appreciated. Thanks Link to comment Share on other sites More sharing options...
Marisawright Posted June 17, 2015 Share Posted June 17, 2015 Can anyone clarify the ATO tax situation if I move permanently to the UK and become non-resident for tax purposes? If my Age Pension was paid into an Australian bank account is it taxed by the ATO? If my Age Pension was paid into a Foreign bank account (by Centrelink) is it taxed by the ATO? Any info would be VERY much appreciated. Thanks You'll find a couple of threads explaining how pensions work. First, we need to know how old you are. If you're already receiving the Australian age pension, then it will still be paid to you in the UK - but you need to check whether you'll receive a reduced amount. If, however, you're leaving before you reach pension age, then you won't be able to collect your Australian state pension at all. However assuming you are already getting the pension, then the answer is - if you have any money of any kind in Australian bank accounts, then the Australian bank will automatically deduct 10% tax from any interest earned. That's the only Australian tax you would be liable for. I don't know whether it can be paid into a foreign bank account - maybe someone else can confirm. Your Australian pension will be treated as income by the British government and they will tax you on it. Link to comment Share on other sites More sharing options...
airham Posted June 17, 2015 Author Share Posted June 17, 2015 Currently in the UK, planning to stay permanently, and in receipt of the Age pension being paid into my Aus bank. According to the ATO if a non-resident (for tax purposes) receives any Aus income then they must complete a tax return. They also say the Age pension is taxable but is it classed as income? Centrelink can pay it into a UK bank which would (maybe) mean only having to complete a UK tax return. Oh the joys of moving overseas! Regards Rik Link to comment Share on other sites More sharing options...
Marisawright Posted June 18, 2015 Share Posted June 18, 2015 Ah, you've raised an issue I hadn't thought about. The Australian state pension must be declared on your Australian tax return whether you're living in Australia or overseas, it doesn't matter. The difference - and it's a big difference - is that if you're living in Australia, you get a tax-free threshold. If your total assessable income is under that threshold then you just declare you're not earning enough, and you don't have to do a tax return. However, if you're living overseas you get NO tax-free threshold, which means everything you earn is subject to tax at the rate of 32.5 cents in the dollar. So you're going to lose 30% of your pension in tax. Where the pension is paid won't make any difference - if it's earned in Australia it's taxable in Australia. The only thing I can suggest, if you're British, is to look into the possibility of using your Australian work record to qualify for the full British pension instead. Link to comment Share on other sites More sharing options...
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