Claiming UK tax back

[Guest Guest14361]

Here's a question for someone, hopefully that someone can answer. My OH is entitled to a pension lump sum off her previous UK employer, she has been given the figure and been told that she will be taxed on 75% of it! I believe that we can claim this tax back, I have been looking through the UK tax website for a form and seem to find nothing,not even a email address where to start enquiring......anybody help??

 

TIA

Edited July 29, 2015 by Guest14361

[Meadows]

Hi Nobby

 

Just going through the same process myself. 25 % tax free but taxed on the remaining 75%, even though not a UK tax payer.

 

According to the paperwork I received from my pension provider, you can download a form from the HMRC website

https://www.gov.uk/government/collections/income-tax-forms. Not sure what happened when I pressed post but the middle part of the web site is collections/income. The form incidentally is an R43.

 

According to my accountant, once I get my UK tax back- the ATO will want their share of the monetary gain on the pension since I left I left the UK/granted PR and the date I cash it in.

Obviously no escaping tax man either in the UK or here.

Cheers

Edited July 29, 2015 by Meadows

[Andrew from Vista Financial]

Hello

 

Whether or not the UK tax the withdrawal Australia will also assess for tax therefore even if the 25% is tax free in the UK Oz will still assess. If UK tax remaining 75% Oz will still assess but a tax credit should be allowable for UK tax paid.

 

This new pensions freedom has only just been introduced in the UK allowing 100% withdrawal and from my understanding you in theory could take 25% now and stagger the remaining withdrawals over time (although whether your actual pension provider will allow it is a different matter) this if possible could result in a lower UK tax bill and although Oz assess as well it is done differently to UK on lump sums for UK pensions as it is only the growth since arriving they assess.

 

Have you also considered leaving in the UK after the 25% and taking income?

[Guest Guest14361]

Hello

 

Whether or not the UK tax the withdrawal Australia will also assess for tax therefore even if the 25% is tax free in the UK Oz will still assess. If UK tax remaining 75% Oz will still assess but a tax credit should be allowable for UK tax paid.

 

This new pensions freedom has only just been introduced in the UK allowing 100% withdrawal and from my understanding you in theory could take 25% now and stagger the remaining withdrawals over time (although whether your actual pension provider will allow it is a different matter) this if possible could result in a lower UK tax bill and although Oz assess as well it is done differently to UK on lump sums for UK pensions as it is only the growth since arriving they assess.

 

Have you also considered leaving in the UK after the 25% and taking income?

 

my wife does not work at all so is she still liable for tax in Australia?

[Andrew from Vista Financial]

So purely from an Australian perspective.

 

The growth portion would be added to her Marginal Tax Rate....example if the UK pension was worth $30,000 when she arrived in Oz and the pot on withdrawal was valued at $40,000 the $10,00 growth would be assessed.

 

In this example since the assessable income ie $10,000 is below the tax free threshold currently $18,200 (https://www.ato.gov.au/Rates/Individual-income-tax-rates/) and assuming no other assessable income is received in that tax year then no tax would be payable.