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ena123

'trivial commutation and aged pension

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My dad is  a n Australian permanent  resident from the UK. He is just about to go on the  Australian aged  pension.  He wants to receive  his private UK pension as a lump sum via'trivial commutation'as  he  has been recently  diagnosed  with  cancer.  

On the  form  from the British  fund, it asks if  he will be" in receipt  of  another  form of income as well as  this". As  he  will be on the Australian aged pension, will i tick  yes on this? 

Also would  anyone here know  how the uk pension lump sum will be taxed in Australia? 

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If he has applied for the Australian pension then they usually require him to apply for the British government pension first, so surely he is receiving that as income too?  

If it's a large sum of money, then it would be worth consulting a tax agent, because there could be thousands to pay in tax if he gets it wrong.    I'm pretty sure there will be a taxation liability in Australia. 

Edited by Marisawright

Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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Thanks 

My dad left ther UK at 23.   (and is turning 66 in a few weeks) and  has been working in Australia over  35 years. Centrelink is still processing the  agen pension applciation (showing the expcted completetion date as his birthday).  Do think even in these circumstances, he is eligible for anything from England

We thoughht that he would not be eligible for the UK state pension, but ill try to investigate this. 

Hi cancer diagnossi means he most likely wont  even be alive when his 2020 tax reurn is lodged in Australia (inApril 2021) 

His UK private pension lump sum is about 14k pounds. My reading leads me t

o it being  taxed at  25 percent, but i dont very  much understand  everything I read 

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6 minutes ago, ena123 said:

Thanks 

My dad left ther UK at 23. 

Ah that makes sense.  You need a minimum of 10 years contributions to get the UK pension.


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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It should only be the growth of the pension since he left UK that is taxed but it will be worth getting some advice. 


So many wineries ......so little time :yes:

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Hello Ena

Take a look here regards lump sum benefit payments (to one's self) from foreign super fund (ie UK Pension Funds), it should help: https://www.ato.gov.au/individuals/international-tax-for-individuals/in-detail/super/tax-treatment-of-transfers-from-foreign-super-funds/?page=5#Transferring_amounts_to_yourself

 

Regards Andy


Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

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On 31/01/2020 at 10:11, ena123 said:

Thanks 

My dad left ther UK at 23.   (and is turning 66 in a few weeks) and  has been working in Australia over  35 years. Centrelink is still processing the  agen pension applciation (showing the expcted completetion date as his birthday).  Do think even in these circumstances, he is eligible for anything from England

We thoughht that he would not be eligible for the UK state pension, but ill try to investigate this. 

Hi cancer diagnossi means he most likely wont  even be alive when his 2020 tax reurn is lodged in Australia (inApril 2021) 

His UK private pension lump sum is about 14k pounds. My reading leads me t

o it being  taxed at  25 percent, but i dont very  much understand  everything I read 

Hiya

I' ve just done one that is trivial,a pension from an engineering company in the UK from the early 1970's.

Gross amount around £1200,I've put the paperwork in a safe place so I'll never be able to find it again,that was only last week.

 

I think it was first 25% tax free,then I paid 20% UK tax on it.

 

Roughly ended up at around £190 tax and I got £1090 paid into a bank account in the UK.They sent me the UK/AUS double taxation agreement to claim the tax back from the UK,as I pay tax in Australia still on my retirement income.

 

The form is around 7 pages,what date I left the UK etc,etc.For me it is easier just to fill in my tax form as£1090 and then say I have paid £190 in the UK.The tax office here will then take it up to the 45% that I will pay on it 

 

If your dad can claim the UK tax back then he will have to fill those forms in,and I take it be taxed on it here at his Australian marginal rate.

 

No idea for putting it into super,that is when a working knowledge of these things can be dangerous,rather than expert knowledge.

 

The number on the form to ring for the taxation is + 44 135 535 9022.

 

Website is .gov .UK search for double taxation 

 

HMRC

PAYE self assessment

BX9 1AS

UK.

 

Again general knowledge rather than specific, he may not be able to put it into super here ,failing the work test.

 

Sorry to hear about his cancer

Good luck

 

When I got mine the trivial is box 2 and 3 ,they are much the same and must be under £30,000 pensions excluding the UK state pension.

I think the trivial only applies to UK income,not living overseas.

 

Edited by Whey aye

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