moving savings back to uk

[Yorkshirepom 1]

can anyone help aim just about sorted booked flight for June to head back to uk question I got is my savings sending them back as the oz dollar the last 3 weeks as gone down a lot and its making a big dent in my funds hopefully it picks up before June if it doesn't can I leave them hear till a better time and transfer later is there a transfer window for getting funds back or would there be any tax issues if I left it to a later time 

[Marisawright 10,054]

There's no tax on transferring your savings from an Australian bank to a British one.  You will be liable to pay Australian tax on any interest the money earns while it's sitting in the Aussie bank, and then you'll also have to declare the interest on your UK tax return.

[Sloth 18]

You should also bear in mind that if you're leaving Australia permanently, you become a non-resident for Australian tax purposes, and any bank interest will be subject to withholding tax.

 

This page explains it: https://www.canstar.com.au/savings-accounts/withholding-tax-savings-account/

 

This para is relevant:

"The ATO explains that if you are a foreign resident, your Australian bank will automatically withhold tax on any interest earned on savings accounts.

The rate of tax withheld depends on whether you let the bank know your overseas address. If you provide an address, withholding tax works out at 10%. Without details of your overseas address, tax is withheld at 47%."

[Yorkshirepom 1]

thanks for the info so if iam reading this right if i leave my money i will have to pay tax in oz and uk on any interest the money makes

[Marisawright 10,054]

18 hours ago, Yorkshirepom said:

thanks for the info so if iam reading this right if i leave my money i will have to pay tax in oz and uk on any interest the money makes

Not quite.  You'll pay tax in Oz, but if you give the bank a UK address, they'll only take 10%.  You won't have to fill in a tax return IF that's the only investment you've got left in Australia (not including your superannuation).    Then you'll need to declare the interest earned on your British tax return, but you'll also declare that you've paid 10% Australian tax, so the UK tax office will deduct that off whatever UK tax you're due to pay.  So you won't pay double tax.

[Yorkshirepom 1]

thanks for that mariswright makes sense now do you no anyways around the suppa no cant touch it till 60 but when i can whats best way to use it or get around the tax man 

 

[Marisawright 10,054]

43 minutes ago, Yorkshirepom said:

thanks for that mariswright makes sense now do you no anyways around the suppa no cant touch it till 60 but when i can whats best way to use it or get around the tax man 

 

First things first.  As soon as you're settled in the UK, write to your super fund, give them your new address, and tell them you've left Australia permanently and want to cancel all insurances.  That will reduce your fees, which means you'll have a higher balance at the end.  

It's a thorny question what to do when you reach 60.  If I'm sure you know there's no Australian tax on super, whether you take a lump sum or convert it to an income stream (pension). HOWEVER the British taxman will take a massive chunk if you take a lump sum.  If you convert it to a pension, it will get taxed in the UK as ordinary income, but of course if you're in retirement and not earning very much, you won't be paying a high rate of tax anyway.  

It will depend on your individual circumstances whether it works out better to do the lump sum or the income stream.

Edited March 19 by Marisawright

[Ken 1,524]

On 13/03/2023 at 15:10, Sloth said:

You should also bear in mind that if you're leaving Australia permanently, you become a non-resident for Australian tax purposes, and any bank interest will be subject to withholding tax.

 

This page explains it: https://www.canstar.com.au/savings-accounts/withholding-tax-savings-account/

 

This para is relevant:

"The ATO explains that if you are a foreign resident, your Australian bank will automatically withhold tax on any interest earned on savings accounts.

The rate of tax withheld depends on whether you let the bank know your overseas address. If you provide an address, withholding tax works out at 10%. Without details of your overseas address, tax is withheld at 47%."

There's actually a third option that's affected one of my clients. The bank doesn't know your UK address but still has your TFN on file. The bank doesn't deduct any tax so the client has to lodge a tax return to pay the withholding tax. If the bank had their UK address and were withholding correctly they wouldn't need to lodge an Australian tax return.

Edited 3 hours ago by Ken