Refund of Australian Superannuation Payments to UK resident

Refund of Australian Superannuation Payments to...

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My client was resident in Australia between September 2001 and April 2004.

 He has been resident in the UK since that time (prior to going to Australia he was not resident in the UK and is not UK domiciled - but the money referred to below has been brought to the UK).  

When working in Australia he paid into the Australian Superannuation system.  As he has no plans to return he applied for a refund of his Superannuation payments.  This was received by him and the Australian authorities deducted 35% tax from the payment, before paying to him.

I believe that this payment should be reported on his Tax Return as foreign pension income.  However, the research I have done suggests that the double tax treaty between UK and Australia (DT 2661)  treats the pension payment as only taxable in the UK, not allowing any credit for the tax deducted at source in Australia. 

Does anyone have any experience of this particular situation.

a )is it correctly treated as a payment from a pension (when actually it's the refund of employment income - which I believe was taxed on the way into the pot)

b) assuming it is pension income, which is my conclusion at the moment, has anyone ever claimed the tax back from the Australian authorities in this situation

Any comments / experience of this issue would be welcome.  Thanks very much.

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By vince8
20th Feb 2013 09:44

Not taxable

If this were a refund of UK superannuation a tax deduction could be made to account for the tax relief already obtained. But I think its not something that goes on a tax return. I do not believe its a pension payment as such so just ignore it.

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