Geraldineinoz Posted April 24 Share Posted April 24 Can someone advise me on how my husband and I would stand if we sold up and moved back to the UK please. We are both aged pensioners and receive a part UK pension, a small Australian pension that I understand will cease once we have moved, my husband has a superannuation income stream that we received monthly, we also have savings in our Australian bank account and would need to sell our house to purchase another in the UK. I am confused as I have been told we would be taxed on everything at 40 percent by the UK tax office, is this right? I kept my UK bank account open and have some savings there which I use for Christmas and birthday presents for my Grandchildren. Any advice will be most helpful. Quote Link to comment Share on other sites More sharing options...
Jon the Hat Posted April 24 Share Posted April 24 Hi Geraldine Your main concern seems to be whether if you sell your house here the proceeds would be taxed in the UK. Generally speaking they would not be, providing you sell while you are resident in Australia. If you were to move first and then sell (because you were in a hurry for some reason) then the rules are different as you will I think not be able to claim it as your primary residence so may end up with a Capital gains tax on the profit - but when that gain is measured from will need to be calculated. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted April 24 Share Posted April 24 @Geraldineinoz, I'll take this one thing at a time. UK Pension The good news is that your UK pension should increase when you move back, because you'll get all the annual increases you missed out on. I recommend you also look into back-paying any missing NHS contributions, which will increase the pension you get. It's not too late! It's usually well worthwhile, but the UK Pension Service can help you work out whether you would benefit from paying them. I suggest waiting until you're in the UK to contact them, because the answer will be different when you're living there, compared to if you enquired now. Australian pension Are you sure you'll lose it? I can believe you'll lose it temporarily, because once you sell your house, you'll have money in the bank and then you'll fail the assets test. However once you've bought your home in the UK, you might be able to get the Aussie pension again. So I wouldn't consider it a lost cause -- keep in touch with Centrelink and let them know when your circumstances change, and see what happens. Superannuation Talk to your husband's superannation company and see if they'll pay the income stream into a UK bank account, or whether they'll have to continue paying it into his Australian bank account. It's no great problem if they pay it into an Aussie account, because then you just use a company like Wise to transfer it when it suits you. The bad news is that his income stream (and your other pensions and income) will be taxed by the UK taxman, but the good news is that it won't all be at 40%! You'll each be liable for the same income tax as every other British individual, i.e. no tax on your first £12,570, then 20% tax on income up to £37,700. Then it's 40% on anything above that. There's no tax exemption for pensions like there is in Australia unfortunately. House Sale/Investments If you sell your house and put the proceeds in an Australian bank account before you leave Australia, the money is just savings and won't be liable for any British tax. If you have other investments, or if you delay the sale until after you've left, it may be a different story and you should get some professional advice. Quote Link to comment Share on other sites More sharing options...
AliG Posted April 24 Share Posted April 24 2 hours ago, Marisawright said: @Geraldineinoz, I'll take this one thing at a time. UK Pension I recommend you also look into back-paying any missing NHS contributions, which will increase the pension you get. It's not too late! Good point but I think you mean National Insurance (NI) contributions? Quote Link to comment Share on other sites More sharing options...
Marisawright Posted April 24 Share Posted April 24 1 hour ago, AliG said: Good point but I think you mean National Insurance (NI) contributions? Sorry yes, I do mean NI contributions. Quote Link to comment Share on other sites More sharing options...
Geraldineinoz Posted April 24 Author Share Posted April 24 Thank you for your help, it has been very helpful. Quote Link to comment Share on other sites More sharing options...
Ken Posted April 25 Share Posted April 25 (edited) As you might be earning a lot of interest on those sale proceeds, make sure to let your bank know that you've left the country and are no longer tax resident in Australia. That way they'll deduct 10% tax from your interest (which you won't like) but (provided that's your only Australian income) you won't have an ongoing need to file Australian tax returns. You'll be able to use that Australian withholding tax to pay your UK tax bill. Beware that Australian taxes on non-residents selling Australian property can be onerous (plus there will UK tax to deal with to). You are definitely better to sell your property before you leave (if it entirely qualifies as your main residence, it'll be tax free). Edited April 25 by Ken 1 Quote Link to comment Share on other sites More sharing options...
Geraldineinoz Posted April 25 Author Share Posted April 25 Thank you Ken, every little bit of information helps Quote Link to comment Share on other sites More sharing options...
Geraldineinoz Posted April 26 Author Share Posted April 26 Just a scenario but if I have sold my house and the money is in my Australian bank account, container on it's way to the UK. I have dealt with all outstanding bills here, now have flights booked, so when do I transfer my money to my UK account which I have kept open, do I do it now or when I get to the UK, or do I wait until I am about to purchase a home? Thank you in advance Quote Link to comment Share on other sites More sharing options...
Marisawright Posted April 26 Share Posted April 26 17 minutes ago, Geraldineinoz said: when do I transfer my money to my UK account which I have kept open, do I do it now or when I get to the UK, or do I wait until I am about to purchase a home? Thank you in advance It won't really matter from a tax point of view. Once you're resident in the UK, you'll be liable to pay UK tax on the interest whether it's sitting in your Australian bank account or in your UK one. Quote Link to comment Share on other sites More sharing options...
Geraldineinoz Posted April 26 Author Share Posted April 26 Thank you Marisa, just wanted to get a clearer picture before starting anything. I am so glad I joined this group, everyone has been very helpful. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.