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Joanne Donnelly

Non resident withholding tax

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Hi, I left AU in August to UK.  I have an Suncorp savings account with savings and it is gaining interest at this time better than UK.  I am intending to send it to enable me to buy a house in UK at some stage but for now there is no hurry.  However, I had contacted the bank about how to transfer the money and therefore they logged that I was in the UK and I now have a resident witholding tax being deducted.   

I am not sure what I am suppose to do this tax year in AU...

Do I complete a tax claim that indicates I have no tax to claim? 

Now that I have left AU do you still have to keep declaring that you have not earnt anything in that tax year every year?

Can I claim the witholding tax back? 

I will not be doing a tax return in UK for this year either. 

I am confused with these matters and there has been alot to sort with moving. Ultimately my money will be moved using moneycorp as I have done so before. The tax situation is new to me.  I just want to restart in UK now and not keep one foot in AU if you know what I  mean.  I did my final tax claim before I left and claimed all my super through the covid recovery package, these savings are all I have now. 

 

Thanks!

 

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You don’t have to do a tax return, as a foreigner you just get the tax deducted and that’s that. If you’re not liable to tax in the UK then you’d be better to bring it over I think


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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Hi, thanks for your reply.  I am a perm resident of AU rather than working holiday etc or sponsorship.. does that make a difference.  I will be planning on moving the money in the next few months to UK well before the start of the new AU tax year I  think is best.  So the money they have taken is gone and not able to be claimed back?

 

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2 hours ago, Joanne Donnelly said:

Hi, thanks for your reply.  I am a perm resident of AU rather than working holiday etc or sponsorship.. does that make a difference.  I will be planning on moving the money in the next few months to UK well before the start of the new AU tax year I  think is best.  So the money they have taken is gone and not able to be claimed back?

 

Permanent residency for immigration purposes and tax residency are two different things. If you are not tax resident in Australia and you don't have any untaxed Australian income then the withholding tax is all you have to pay in Australia and you don't need to complete a tax return (that's provided the ATO isn't asking for one because you haven't told them you're no longer resident). But the tax paid isn't gone, it reduces the tax to be paid on your UK tax return (I hope you weren't thinking you didn't have to declare the Australian interest on your UK tax return). You declare both the gross interest and the amount of tax you've paid, they calculate the UK tax due on the interest and deduct the tax you've already paid from that.

It makes no difference whether you are earning interest on the money in the UK or Australia you still have to pay UK tax on it and for almost everyone the UK tax is more than the 10% Australian Withholding Tax (the only exception is if you're not earning enough to be paying tax). If you are getting a better interest rate in Australia than you can get in the UK then leave it in Australia.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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9 hours ago, Joanne Donnelly said:

Hi, thanks for your reply.  I am a perm resident of AU rather than working holiday etc or sponsorship.. does that make a difference.  I will be planning on moving the money in the next few months to UK well before the start of the new AU tax year I  think is best.  So the money they have taken is gone and not able to be claimed back?

 

No it makes no difference. Now you are no longer living in Australia,  you're treated as a foreigner for tax purposes.   So yes, the money is gone, it's tax you are legally liable to pay.


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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How much did they withhold? If it's the 10% non-resident tax then you don't have to do anything.  If they withheld you at the resident rate of 4X% then you need to file a claim to get it back.

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28 minutes ago, rtritudr said:

How much did they withhold? If it's the 10% non-resident tax then you don't have to do anything.  If they withheld you at the resident rate of 4X% then you need to file a claim to get it back.

@Joanne Donnelly, good point - the non-resident rate is only 10% so if it was more than that, you need to file a final tax return to get it back.


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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Thank you for the replies... it appears to be the 10% amount so that is ok better that 4X% ! I will let the tax go and get my money moved soon enough 🙂 Thanks!

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