Slawka Posted October 19, 2015 Share Posted October 19, 2015 Hi, I've sold house in UK and I would like to transfer money to my AU account now because of good exchange rate. However, I am going to migrate at some point during next year, not sure exactly when. Can be 6 months or even up to an year later. Is there any issues with that like extra tax or something like that? I appreciate advise. Thank you. Link to comment Share on other sites More sharing options...
Ken Posted October 20, 2015 Share Posted October 20, 2015 As a non-resident you will have 10% Withholding tax deducted from your interest, but if you're resident in the UK you'll be paying more tax than that on your interest (assuming you earn more than the tax free threshold). Under the double taxation agreement you get to deduct the amount of Australian Tax that's been withheld from the amount of tax you have to pay on that interest in the UK. While a non-resident you won't have to pay any other Australian Tax nor will you need to file a tax return. Link to comment Share on other sites More sharing options...
Slawka Posted October 20, 2015 Author Share Posted October 20, 2015 Hi Ken, Thank you for your reply however I do not understand everything. Lets say I will have 1000AUD interests in Australian bank so I have to pay 10% in AU which will be 100AUD. I am not Australian resident. (Do I need to prepare tax return in AU in this case?) Because I am UK resident I have to include interest from Australian savings minus tax already paid in AU which give me 900AUD. Then my annual income in UK will increase and I will have to pay tax for additional 900AUD. Am I right? I appreciate your clarification. Thank you so much once again. As a non-resident you will have 10% Withholding tax deducted from your interest, but if you're resident in the UK you'll be paying more tax than that on your interest (assuming you earn more than the tax free threshold). Under the double taxation agreement you get to deduct the amount of Australian Tax that's been withheld from the amount of tax you have to pay on that interest in the UK. While a non-resident you won't have to pay any other Australian Tax nor will you need to file a tax return. Link to comment Share on other sites More sharing options...
Ken Posted October 20, 2015 Share Posted October 20, 2015 Hi Ken, Thank you for your reply however I do not understand everything. Lets say I will have 1000AUD interests in Australian bank so I have to pay 10% in AU which will be 100AUD. I am not Australian resident. (Do I need to prepare tax return in AU in this case?) Because I am UK resident I have to include interest from Australian savings minus tax already paid in AU which give me 900AUD. Then my annual income in UK will increase and I will have to pay tax for additional 900AUD. Am I right? I appreciate your clarification. Thank you so much once again. Hi Slavka, As I put in my original post, because you're not an Australian Resident you will not need to file a tax return (in Australia). On your UK Tax Return you do need to put both the 1,000AUD that you've received (converted to GBP) and the 100 AUD of Tax that you've paid. How much tax you have to pay on this interest will depend on how much other income that you have, but if for example you're only a basic rate tax payer it will be 20% so 200AUD of Tax on the 1,000AUD less the 100AUD of Tax paid = an additional 100AUD of Tax to pay to HMRC (although as I said you have to convert the numbers to GBP on your tax return). Why it's very important to report both the gross income and the tax paid is that if you only report the net amount as you've suggested then you'd have to pay 20% of 900AUD to HMRC which is 180AUD so you'd be 80AUD worse off. Link to comment Share on other sites More sharing options...
Slawka Posted October 20, 2015 Author Share Posted October 20, 2015 Thank you for your explanation. It is clear right now. Wish you nice day Hi Slavka, As I put in my original post, because you're not an Australian Resident you will not need to file a tax return (in Australia). On your UK Tax Return you do need to put both the 1,000AUD that you've received (converted to GBP) and the 100 AUD of Tax that you've paid. How much tax you have to pay on this interest will depend on how much other income that you have, but if for example you're only a basic rate tax payer it will be 20% so 200AUD of Tax on the 1,000AUD less the 100AUD of Tax paid = an additional 100AUD of Tax to pay to HMRC (although as I said you have to convert the numbers to GBP on your tax return). Why it's very important to report both the gross income and the tax paid is that if you only report the net amount as you've suggested then you'd have to pay 20% of 900AUD to HMRC which is 180AUD so you'd be 80AUD worse off. Link to comment Share on other sites More sharing options...
Loulou Posted October 20, 2015 Share Posted October 20, 2015 Iam totally lost, so iam selling my house in the UK and from the sale iam transferring say for example 30000, sorry Ken my knowledge on this is zilch! What do I need to do as I have not thought about this, I have secured a transfer at a good rate with halo but didn't think about tax! Any advice appreciated. Link to comment Share on other sites More sharing options...
Bungo Posted October 20, 2015 Share Posted October 20, 2015 Iam totally lost, so iam selling my house in the UK and from the sale iam transferring say for example 30000, sorry Ken my knowledge on this is zilch! What do I need to do as I have not thought about this, I have secured a transfer at a good rate with halo but didn't think about tax! Any advice appreciated. I remember you from the other day. Aren't you moving your money over around the same time you move? Link to comment Share on other sites More sharing options...
Loulou Posted October 20, 2015 Share Posted October 20, 2015 Hi Bungo, yes iam going 1/5/2016 flight all booked, now my visa has come through so will transfer the money the week before. Link to comment Share on other sites More sharing options...
Bungo Posted October 20, 2015 Share Posted October 20, 2015 Hi Bungo, yes iam going 1/5/2016 flight all booked, now my visa has come through so will transfer the money the week before. There are no tax issues for you to worry about in this case. Well other than ATO might enquire as to the nature of the transfer, but you say what it is and that is that. Link to comment Share on other sites More sharing options...
Loulou Posted October 20, 2015 Share Posted October 20, 2015 Great thanks, again hahah! Link to comment Share on other sites More sharing options...
Ken Posted October 21, 2015 Share Posted October 21, 2015 Iam totally lost, so iam selling my house in the UK and from the sale iam transferring say for example 30000, sorry Ken my knowledge on this is zilch! What do I need to do as I have not thought about this, I have secured a transfer at a good rate with halo but didn't think about tax! Any advice appreciated. Hi Loulou there's no tax implication on the money you move across. The tax Slawka was discussing was on the interest. If you've opened an Australian bank account and aren't yet an Australian resident they will deduct 10% withholding tax from the interest they pay you and because Slawka is still a British resident he's liable to UK tax on his interest. Since the money is from the sale of your house in the UK you're clearly planning to depart the UK and be in Australia before you get any interest so this really doesn't apply to you. However you do need to give your bank your TFN (Australian Tax File Number) as soon as you have it (you can't apply for it until you have an address in Australia for it to be posted to) as without that they'll still deduct the 10% Withholding Tax. Incidentally if you're keeping a UK interest bearing bank account open you can tell them to pay the interest gross (you should be able to get a form from them before you go to do this). Link to comment Share on other sites More sharing options...
Loulou Posted October 21, 2015 Share Posted October 21, 2015 Thanks ken, so I need to inform the oz bank of my tfn number when received?, iam keeping my current accounts open in the UK so do I need to do anything? Sorry iam useless with financial issues such as tax! Link to comment Share on other sites More sharing options...
Ken Posted October 22, 2015 Share Posted October 22, 2015 Thanks ken, so I need to inform the oz bank of my tfn number when received?, iam keeping my current accounts open in the UK so do I need to do anything? Sorry iam useless with financial issues such as tax! No need to do anything however if your current accounts don't pay interest, but if they do pay interest and you're leaving the UK in May then before you leave (but after 5th April so it's in next Tax Year) tell your bank to pay your interest gross. The reason being you shouldn't have to pay any tax in the UK next year (although there is a possibility the UK will abolish the tax free allowance for non-residents). Link to comment Share on other sites More sharing options...
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