Parents now Permanent resident what about tax UK/or AU ???

[mcgkerry]

Hi all

My parents have their permanent residency here now :-) Yeahhhhhhh

They get only a UK State pension paid directly into a bank account in AU.

Dad got a letter from his UK bank where he only has a few hundred pounds and no deposits going in asking to verify where he is resident for HMRC For tax ???

Question: I assume we say resident in AU ? 

Question: His total state pension income is aprox 21K au dollars depending on exchange rates and mums is even less probably about 10K....so will he get a tax bill here now ??.......which they cannot  afford :-(

Thanks in anticipation

Kerry

 

[rammygirl]

Yes they are resident in Australia for tax and will need to do a tax return including all their income regardless of where it is from. 

There may be some tax payable

They should have been doing this while on a temp visa too, although the UK income would not have been taxable as they were not PR  

[Marisawright]

Yes, he is resident in Australia.  The danger is that if he tells them, they may insist he closes the UK bank account - some banks are funny about letting foreign residents hold accounts with them.   

They are now resident in Australia for tax purposes, which means they'll be taxed the same as you or any other Australian.  I'm sure you know, everyone gets a tax-free threshold of $18,200 (which means your first $18,200 of income is not taxed at all).   

So your mother will pay no tax, she just needs to submit a "Non Lodgment Advice".  

https://www.etax.com.au/tax-free-threshold/

Your father is just over the threshold, however he will be entitled to a further rebate because he's an Older Person, so he may or may not have some tax to pay.  He'll need to do a tax return.  Don't forget he needs to declare all his income, including any interest from the British bank account.

https://www.etax.com.au/tax-return-calculator/

 

[Tulip1]

10 minutes ago, Marisawright said:

Yes, he is resident in Australia.  The danger is that if he tells them, they may insist he closes the UK bank account - some banks are funny about letting foreign residents hold accounts with them.   

They are now resident in Australia for tax purposes, which means they'll be taxed the same as you or any other Australian.  I'm sure you know, everyone gets a tax-free threshold of $18,200 (which means your first $18,200 of income is not taxed at all).   

So your mother will pay no tax, she just needs to submit a "Non Lodgment Advice".  

https://www.etax.com.au/tax-free-threshold/

Your father is just over the threshold, however he will be entitled to a further rebate because he's an Older Person, so he may or may not have some tax to pay.  He'll need to do a tax return.  Don't forget he needs to declare all his income, including any interest from the British bank account.

https://www.etax.com.au/tax-return-calculator/

 

The bank has asked the question, your dad must respond  with the correct information.  Nothing to be concerned about I'm sure, the bank is just doing due diligence. As what has been mentioned, I believe everyone resident in Australia has to do an annual tax return.

[Marisawright]

12 minutes ago, Tulip1 said:

The bank has asked the question, your dad must respond  with the correct information.  Nothing to be concerned about I'm sure, the bank is just doing due diligence. As what has been mentioned, I believe everyone resident in Australia has to do an annual tax return.

Actually, everyone resident in Australia has to submit either a tax return, or a statement declaring they didn't earn enough money to need one (called a Non Lodgment Advice).  

[ramot]

1 hour ago, rammygirl said:

Yes they are resident in Australia for tax and will need to do a tax return including all their income regardless of where it is from. 

There may be some tax payable

They should have been doing this while on a temp visa too, although the UK income would not have been taxable as they were not PR  

We have been on a temporary visa in Oz for 15 years, all our income comes from UK and we pay UK tax. Obviously this changes with PR.

Also the letter from UK banks is quite normal from U.K. Banks,  we replied and heard no more.

Edited May 10, 2018 by ramot

[Marisawright]

9 minutes ago, ramot said:

Also the letter from UK banks is quite normal from U.K. Banks,  we replied and heard no more.

I think it depends on the bank.  We know people who bank with Barclays and they had their account closed.  Or maybe it depends on the mood of the bank official at the time!

[ramot]

Just now, Marisawright said:

I think it depends on the bank.  We know people who bank with Barclays and they had their account closed.  Or maybe it depends on the mood of the bank official at the time!

 

1 minute ago, Marisawright said:

I think it depends on the bank.  We know people who bank with Barclays and they had their account closed.  Or maybe it depends on the mood of the bank official at the time!

I'm sure you are right, but we have several accounts as do our family here with different banks and no one has had a problem. Banks sometimes close accounts that have had no movement for a certain length of time. Even our daughter with very little in her account is fine, but a small amount is paid in regularly to keep the account open. With no disrespect we know a lot of English people here who have had no problem, so yours seems an isolated case.

[Marisawright]

5 minutes ago, ramot said:

 

I'm sure you are right, but we have several accounts as do our family here with different banks and no one has had a problem. Banks sometimes close accounts that have had no movement for a certain length of time. 

That might be the explanation, the bank never bothered to explain the reason.  However the OP did say his father has only a small amount in there and is not making any deposits...

[Guest]

I've moved this to the Money/Finance section as its not a visa issue. 

[Guest]

13 minutes ago, Marisawright said:

I think it depends on the bank.  We know people who bank with Barclays and they had their account closed.  Or maybe it depends on the mood of the bank official at the time!

I think it can vary what action banks take. Or from bank to bank. Some seem to be ok with overseas account holders, others not. 

 

@mcgkerry  this question is one all banks have to ask their customers now and are obliged to file a report back to HMRC regarding the answer. Many members on here, including myself have had that sort of letter asking them to inform where resident for tax purposes. 

 

[Tulip1]

22 hours ago, Marisawright said:

I think it depends on the bank.  We know people who bank with Barclays and they had their account closed.  Or maybe it depends on the mood of the bank official at the time!

Thousands of ex pats continue to keep their bank accounts open in the UK. The banks just need up to date information on their customers. If customers do not provide it when asked the bank may well close their account. I'd be surprised if any bank would close an account just because someone has moved. Likely to be closed if it has been dormant for many years or information requested wasn't given. 

[Marisawright]

45 minutes ago, Tulip1 said:

Thousands of ex pats continue to keep their bank accounts open in the UK. The banks just need up to date information on their customers. If customers do not provide it when asked the bank may well close their account. I'd be surprised if any bank would close an account just because someone has moved. Likely to be closed if it has been dormant for many years or information requested wasn't given. 

There may be thousands of expats with bank accounts in the UK but there are also many who've had them closed.  It's all to do with the new anti-money-laundering laws.  Some banks are more stringent in applying the laws than others.   I know people who have had their accounts closed, all with Barclays, so maybe they are being more heavy-handed than the rest.

The new rules have affected a lot of things. Remember how, only three or four years ago, you could open a bank account in the UK before you even left Australia?  You can't now. In fact, although they say you can open an account the day you arrive, it's not true unless you already have a permanent UK address (and can prove it). 

However, Ramot has reminded me of the detail I'd forgotten - those accounts were also not being used.   If an account is held by someone overseas AND there are no deposits or withdrawals on it for several months, that's when they close it.  

[ramot]

27 minutes ago, Marisawright said:

There may be thousands of expats with bank accounts in the UK but there are also many who've had them closed.  It's all to do with the new anti-money-laundering laws.  Some banks are more stringent in applying the laws than others.   I know people who have had their accounts closed, all with Barclays, so maybe they are being more heavy-handed than the rest.

The new rules have affected a lot of things. Remember how, only three or four years ago, you could open a bank account in the UK before you even left Australia?  You can't now. In fact, although they say you can open an account the day you arrive, it's not true unless you already have a permanent UK address (and can prove it). 

However, Ramot has reminded me of the detail I'd forgotten - those accounts were also not being used.   If an account is held by someone overseas AND there are no deposits or withdrawals on it for several months, that's when they close it.  

I think it's more like a couple of years Marisa not months, but you are right Barclays did have a purge a few years ago, but don't know what happened in the end, and I don't think any other bank followed suit. 

[Tulip1]

7 hours ago, Marisawright said:

There may be thousands of expats with bank accounts in the UK but there are also many who've had them closed.  It's all to do with the new anti-money-laundering laws.  Some banks are more stringent in applying the laws than others.   I know people who have had their accounts closed, all with Barclays, so maybe they are being more heavy-handed than the rest.

The new rules have affected a lot of things. Remember how, only three or four years ago, you could open a bank account in the UK before you even left Australia?  You can't now. In fact, although they say you can open an account the day you arrive, it's not true unless you already have a permanent UK address (and can prove it). 

However, Ramot has reminded me of the detail I'd forgotten - those accounts were also not being used.   If an account is held by someone overseas AND there are no deposits or withdrawals on it for several months, that's when they close it.  

Maybe Barclays is different I don't know but certainly the majority of UK banks do not randomly close accounts in that way. As I mentioned, if an account is dormant for sometime then the customer would be written to about it. If the customer did nothing then they would receive notice ithat it will close. It is possible to open an account on the day you arrive, you can use your overseas address to open it (as long as you have certain documents to prove you lived there, the usual, driving license, bank statement etc).  You then add your new UK address as a correspondence address. 

[Marisawright]

3 hours ago, Tulip1 said:

Maybe Barclays is different I don't know but certainly the majority of UK banks do not randomly close accounts in that way. As I mentioned, if an account is dormant for sometime then the customer would be written to about it. If the customer did nothing then they would receive notice ithat it will close. It is possible to open an account on the day you arrive, you can use your overseas address to open it (as long as you have certain documents to prove you lived there, the usual, driving license, bank statement etc).  You then add your new UK address as a correspondence address. 

@Tulip1, the rules were changed in 2015/2016 and caused a lot of angst for expats, e.g.

https://www.telegraph.co.uk/expat/money/uk-banking-options-narrowing-for-british-expats/

https://www.cadogantate.com/en/moving-services/news/banking-options-decrease-british-expats

https://www.telegraph.co.uk/finance/personalfinance/expat-money/11746500/Barclays-to-close-expats-bank-accounts-unless-they-deposit-100000.html

http://www.thisismoney.co.uk/money/experts/article-3254953/Barclays-closing-current-account-49-years-loyalty-live-abroad-plan-UK-banking-giant-this.html

https://www.theguardian.com/money/2015/aug/26/hsbc-closed-bank-accounts

The reason I know is that we moved back to the UK in 2015 and arrived right in the middle of it.  I assumed, from past experience, that I'd be able to open a bank account before I arrived.  In fact, the change was so recent, Citibank and HSBC were still advertising the service on their websites - but when I called them, I got told no.  

I was allowed to open an account on the day I arrived by showing my British passport - but I could only deposit money, not withdraw.  I was told I wouldn't be able to transact on the account until I could show proof of a British residence.  My husband, who has an Australian passport, tried several banks and was turned away - he was told to come back when he had proof of a British address.

If the rules have been relaxed since then, that would be good news. Are you positive that's the case?

Edited May 12, 2018 by Marisawright