# Am I liable for UK tax if I am a non-resident?



## rogerbid

Hi Everyone,

I apologise if I should have found the answer to my question by searching the forum but I have looked without success.

I have been a permanent resident of Australia since 1986, and since January this year I have received the UK Aged Pension plus a pension from a former UK employer.

I have told the UK tax people that I am a non-resident but they persist in sending me one tax code after another.

I am frustrated in my dealings with the UK HM Revenue and Customs but wonder if anyone can tell me categoricaly whether, as a non UK resident, 'Am I liable to pay ANY tax in UK?'

My understanding is that I should not have any tax deducted, and if someone can confirm this, then I will continue to write and phone the HMRC until I get a tax refund for the 2011 - 2012 year and my pensions without deductions.

Thanks,

Roger


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## naoto

As far as I understood if you chose not to transfer your pension to Australia you still need to pay UK tax on it. The good news, it should be deductible in Australia, i.e. you don't pay Aussie tax on top.


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## rogerbid

naoto said:


> As far as I understood if you chose not to transfer your pension to Australia you still need to pay UK tax on it. The good news, it should be deductible in Australia, i.e. you don't pay Aussie tax on top.


Sorry Naoto, Thanks for your quick reply but I should have said I have my pensions paid to an Australian Bank account so I guess you are saying I need not be liable?

Thanks again,

Roger


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## naoto

The best is to get a professional advice. I meant transfer of the whole pension into super, so it is paid from Australia. As far as I know banks, like westpac and Combank, used to do this for free. Also most Super funds do that. The idea is: If you receive payments from your pension account in the UK while you’re living in Australia, they could be taxed at up to 46.5%. This is because the payments will
be considered as ordinary income from overseas by the Australian Government. However payments from an Australian super or pension account are taxed at a lower rate, and once you turn age 60, they are tax-free.

To give you general pointers:

If you’ve moved from the UK to Australia and you’re now an Australian resident, there could be good reasons to transfer the balance of your UK pension account into Super. Most Super provider are recognised by UK authorities as a Qualifying Recognised Overseas Pension Scheme.

If you transfer your UK pension fund balance to a super fund which is not authorised to accept transfers you could incur penalties and charges from the UK Government of up to 55% of your balance. 

If your transfer amount is less than the UK lifetime allowance, it will be tax free. The UK lifetime allowance is set by UK Treasury each year and for 2009/2010 it’s £1.75 million. If your transfer amount is above the UK lifetime allowance it will be taxed at 25%.

If you’ve been an Australian resident for more than six months, you’ll need to pay tax at your marginal tax rate on the ‘assessable amount’. The assessable amount is any investment earnings that have been applied to your UK pension account between the date you became an Australian esident, and the date your money is transferred to Australia.


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## rogerbid

Helo again and thanks so much for your comprehensive reply.

This is most helpful and I will act upon your advice.

Thanks again,

Roger


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## CapnBilly

Couple of points :

1. As far as I am aware you cannot transfer into QROPS if
a) you have already drawn your pension from a final salary scheme
b) you have drawn an annuity from a private pension.

My understanding from your post is that you are already drawing your pension from an employer scheme. NB If your former employer was a government or local authority, then any pension WILL always be taxed in the UK

2. Your UK state pension is taxable in Australia under the terms of the dual taxation agreement, BUT normally HMRC will only allow it to be paid tax free ( plus any emploder pension that is not taxable in the UK) if you prove that you are tax resident in Australia. 

The double taxation agreement between the UK and Australia is set out here

The form that you will need to complete is downloadable from here


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## rogerbid

*"My understanding from your post is that you are already drawing your pension from an employer scheme. NB If your former employer was a government or local authority, then any pension WILL always be taxed in the UK"*

Yes that's correct, and yes it was from a Government pension scheme, the Civil Service Pensions through Capita Hartshead. Presumably I can claim back the tax paid in UK at the end of each tax year?

*"The form that you will need to complete is downloadable from here" *

Thanks, I have already completed and lodged the form 'Form Australia-Individual 2003'. Presumably by completing this I will satisfy the requirement you mention to *"prove that you are tax resident in Australia"*

I guess all I can do is wait and see how things pan out, I am still bewildered by the number of Coding Notices I am receiving with no explanation for the changes. I get the distinct impression that HMRC do not really know what they are doing!

Thanks for the ongoing replies,

best wishes,

Roger


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