Pension question

[Linda kirkham]

 

I'm waiting for my contributory aged parents visa to get processed in the next year and will be on a bridging visa until then - should I contact my state and works pensions which I'm receiving now to inform them to transfer into an Australian bank account or wait till it my visa is granted . It was submitted 10 months ago - I am moving and renting in Sydney for the next 18 months until it is processed

 

 

Sent from my iPad using PomsinOz

 

Edited August 19, 2017 by snifter
Amended title

[Bridgeman]

Some private pension funds will only pay into a UK bank account, so you will need to ask them if they would be prepared to pay into an Australian account, you may have no choice.  With regard to the state pension, you do not necessarily have to have it paid into an Australian bank account.  We still get all our pension paid into our UK bank and bring over when we decide the exchange rate is right using HiFx so we have more control over it.  You will not have any control over the exchange rate if it is paid direct into an Australian bank account.

[Linda kirkham]

Thanks for that - but do you still have to pay the uk tax if you have it paid in the uk acc and then have to pay the oz Gov as well ? 

[winter1]

18 hours ago, Linda kirkham said:

Thanks for that - but do you still have to pay the uk tax if you have it paid in the uk acc and then have to pay the oz Gov as well ? 

When you leave the UK you will need to fill in HMRC tax form P85. This will stop you paying tax on your UK aged pension in the UK it will then be taxed in Australia after you have reached the tax free threshold. This is the case regardless of where it is banked. However the amount that you receive could be taxed annually in your tax return. you should talk to an  Australian accountant with regards this. If you have certain occupational pensions from the UK mainly civil service pensions these could still be taxed in the UK but you will not pay tax twice due to the double tax treaty and you normally keep your UK tax free threshold.

I hope you are aware that your aged pension will never increase each year after you arrive in Australia as Australia along with many Commonwealth countries is a frozen destination. 

Also inform your occupational pension scheme if you are in one  you are going to a frozen country as they will by law have to make up part of the GMP element of your aged pension. The part they make up is only a small percentage of the increase you will lose each year.

please see the links below.

 

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

https://www.theguardian.com/money/2015/aug/15/hope-for-expats-uk-pensions

[Linda kirkham]

Thx so much - will follow it up

[Alan Collett]

On 21/08/2017 at 12:22, winter1 said:

When you leave the UK you will need to fill in HMRC tax form P85. This will stop you paying tax on your UK aged pension in the UK it will then be taxed in Australia after you have reached the tax free threshold. This is the case regardless of where it is banked. However the amount that you receive could be taxed annually in your tax return. you should talk to an  Australian accountant with regards this. If you have certain occupational pensions from the UK mainly civil service pensions these could still be taxed in the UK but you will not pay tax twice due to the double tax treaty and you normally keep your UK tax free threshold.

I hope you are aware that your aged pension will never increase each year after you arrive in Australia as Australia along with many Commonwealth countries is a frozen destination. 

Also inform your occupational pension scheme if you are in one  you are going to a frozen country as they will by law have to make up part of the GMP element of your aged pension. The part they make up is only a small percentage of the increase you will lose each year.

please see the links below.

 

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

https://www.theguardian.com/money/2015/aug/15/hope-for-expats-uk-pensions

The form P85 on its own will not lead to the correct taxation of the UK pension income.

See this form: https://www.gov.uk/government/publications/double-taxation-treaty-relief-form-dt-individual

Remember to look into claiming a tax deduction in Australia for the UPP, or Undeducted Purchase Price of the pension.

Best regards.

[Guest The Pom Queen]

Have a chat with @Andrew from Vista Financial He is our pension/super guru

[Andrew from Vista Financial]

Given the pensions are in payment then it looks as though the other members have looked after this question already (and well might I add).

Regards

Andy