Share this content
5

Australian pension, UK resident

We have a client who is resident in the UK but is in receipt of an Australian MilitarySuper pension.

Didn't find your answer?

He has provided us with a PAYG payment summary which details Total Tax Withheld for 2018/19 financial year which we understand means he has to submit a tax return in Australia.

Should the full amount received from the pension be declared on the UK tax return and any tax due from the pension be paid in this country?  This is our understanding however we are concerned he will be 'double taxed' due to the total tax withheld figure showing on his PAYG summary.

Replies (5)

Please login or register to join the discussion.

avatar
By Accountant A
11th Nov 2019 14:16

What does the UK/Australia Double Tax Agreement have to say on the subject?

Sorry, should have said "please", very rude of me.

Thanks (1)
avatar
By CarolineTNS
11th Nov 2019 14:29

Hi Accountant A,

Thank you for your reply.

The UK have a double taxation agreement with Australia but we just wanted to make sure we were doing things correctly at this end.

Thanks (0)
Replying to CarolineTNS:
avatar
By Accountant A
11th Nov 2019 14:31

CarolineTNS wrote:

Hi Accountant A,

Thank you for your reply.

The UK have a double taxation agreement with Australia but we just wanted to make sure we were doing things correctly at this end.

I know, that's why I said "What does the UK/Australia Double Tax Agreement have to say on the subject?".

So, what does the UK/Australia Double Tax Agreement have to say on the subject? It's not a trick question.

Thanks (0)
avatar
By daniel_
11th Nov 2019 14:37

It says in the DTA in article 17:
"Pensions (including government pensions) and annuities paid to a resident of a
Contracting State shall be taxable only in that State."
https://www.gov.uk/government/publications/australia-tax-treaties

Thanks (1)
Replying to daniel_:
avatar
By David Heaton
11th Nov 2019 16:01

In theory, the answer is simple. He's a UK resident so he's taxable only in the UK. Have you checked the treaty to ensure he is not deemed Australian resident - unlikely, but possible because their residence rules are not the same as ours? The tiebreaker will presumably make him UK resident, so ...

The Super payroll has deducted Australian tax because it is following local rules. Your client needs to make an application under the treaty to be exempted from Australian tax. The ATO should then authorise the Super to pay gross. There will undoubtedly be some form-filling involved, and you will probably need a certificate of UK tax residence from HMRC, which you can request online and should arrive within a few weeks. You need to specify in the application that you are applyingfor an exemption under Art 17, as that will be specified in the certificate that you are sent for passing on to the ATO. HMRC will also only give you a certificate for a closed tax year, as it cannot know where you will be later this year or next. That's why you will need to complete the ATO's own forms as well. Good luck.

Thanks (1)
Share this content