Military Pension and Lateral Transfer to Commonwealth Forces
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Military Pension and Lateral Transfer to Commonwealth Forces
What's the Bobby with serving with a Commonwealth Military and drawing your military pension from the UK? Looking at Canada and Australia. Is there an MOU? I've tried a search, as I have seen discussion on this before, but to no avail. Help thankfully acknowledged.
Join Date: Dec 1998
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HM
You can get your pension paid overseas for a small monthly fee. As for Oz, there is a dual taxation agreement in place so you can either pay tax at 22% in the UK and pay a top up amount in Oz (+18%) or pay in full in Oz. I am in the process of arranging to do the latter by telling the UK IR that I am no longer a UK tax resident. Some people then forget to tell the Oz Tax Office and withdraw the gross pension from the UK bank from an Oz ATM - I for one will not be doing so as I don't fancy a late night visit from a tax investigator!
Your gratuity is tax exempt in UK and Oz, although there are some rules which say you must import all funds into Oz within 12 months. Any interest earnt whilst you are in Oz should also be declared.
PM me if you need more.
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HPT
You can get your pension paid overseas for a small monthly fee. As for Oz, there is a dual taxation agreement in place so you can either pay tax at 22% in the UK and pay a top up amount in Oz (+18%) or pay in full in Oz. I am in the process of arranging to do the latter by telling the UK IR that I am no longer a UK tax resident. Some people then forget to tell the Oz Tax Office and withdraw the gross pension from the UK bank from an Oz ATM - I for one will not be doing so as I don't fancy a late night visit from a tax investigator!
Your gratuity is tax exempt in UK and Oz, although there are some rules which say you must import all funds into Oz within 12 months. Any interest earnt whilst you are in Oz should also be declared.
PM me if you need more.
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HPT
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HM
As has been stated , there is a reciprocal tax arrangement with both Australia and Canada, where you will be taxed at rate which is applicabe to where you are, which i believe in Aus is 40% if you are earning more than $75,000.
Here are few sites that may help
http://www.ato.gov.au/individuals/co...tent/12333.htm
http://www.hmrc.gov.uk/si/double.htm
http://www.hmrc.gov.uk/cnr/app_dtt.htm#4
DF
As has been stated , there is a reciprocal tax arrangement with both Australia and Canada, where you will be taxed at rate which is applicabe to where you are, which i believe in Aus is 40% if you are earning more than $75,000.
Here are few sites that may help
http://www.ato.gov.au/individuals/co...tent/12333.htm
http://www.hmrc.gov.uk/si/double.htm
http://www.hmrc.gov.uk/cnr/app_dtt.htm#4
DF
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I think a very simplified method to work out your take-home pay on lateral transfer would be to add ADF pay to your pension and subtract 1/3. That should give you an idea of your annual spending money, from which you could estimate a standard of living etc.
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When making that UK/OZ comparison, that the UK basic rate of income tax is to drop to 20% (from 22%) in April (which might make that 2.6% rise seem a little more palatable) but of note to you Huey, the existing starting rate of 10% for pensions will be removed, so you'll be paying full whack on it from the outset. The personal allowance will increase to £5,500 ish for 08/09 and the upper threshold will only creep up to £36k (ish) instead of the current 34.6k (because inflation is only about 2%, obviously 
).
It might also be an idea to keep your powder dry until after the budget, especially if you are thinking about buying property where you're going. The G'ment intends to legislate this year, to ensure that individuals who are buying a house abroad (to live in, or to let), will be exempt from tax on any potential benefit for private use of the property. I suppose a lot will depend on your timings, when you intend to move. How that will work out with regards to Capital Gains Tax if you sell (when/if you return) is anyone's guess, but if you remain domicile here then you should maintain exemption from CGT because you can argue that its your main residence, wherever that happens to be.
).It might also be an idea to keep your powder dry until after the budget, especially if you are thinking about buying property where you're going. The G'ment intends to legislate this year, to ensure that individuals who are buying a house abroad (to live in, or to let), will be exempt from tax on any potential benefit for private use of the property. I suppose a lot will depend on your timings, when you intend to move. How that will work out with regards to Capital Gains Tax if you sell (when/if you return) is anyone's guess, but if you remain domicile here then you should maintain exemption from CGT because you can argue that its your main residence, wherever that happens to be.
Last edited by Al R; 11th Feb 2008 at 14:24.
By moving to OZ and joining their armed forces you will become a permanent resident for a short time and a full citizen shortly therafter. As such you will be domiciled and resident in OZ for all tax liabilities.
So to a large extent what the UK rate is doesn't really matter as the OZ tax authorities will look at your worldwide income, assess the tax liabilty at OZ rates, subtract the amount of tax you paid (if any) in the UK and hit you for a bill for the remainder.
System is the same too in NZ and like HPT I have now sorted paying tax only in my country of residence, NZ, as it is far simpler dealing with only one tax authority.
Once established and domiciled in OZ your house ownership status there is not relevant to UK tax authorities. However, any residual property, funds etc in the UK would be best transferred into your wifes name as Al R said. (Until he edited his post
)
See a professional as soon as you arrive.
So to a large extent what the UK rate is doesn't really matter as the OZ tax authorities will look at your worldwide income, assess the tax liabilty at OZ rates, subtract the amount of tax you paid (if any) in the UK and hit you for a bill for the remainder.
System is the same too in NZ and like HPT I have now sorted paying tax only in my country of residence, NZ, as it is far simpler dealing with only one tax authority.
Once established and domiciled in OZ your house ownership status there is not relevant to UK tax authorities. However, any residual property, funds etc in the UK would be best transferred into your wifes name as Al R said. (Until he edited his post
)See a professional as soon as you arrive.
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I had a crisis of confidence. 
Capital gains tax doesn't apply when you sell your main residence anyway, so you can forget about CGT from that. By the same token, holding onto it might present a problem in establishing Oz domicility (HMRC won't let go lightly - they'd ask why you were keeping hold of it). In any case, if you had argued successfuly for Oz domicility, you'd be liable to Oz tax on income received by her if you kept it and simply rented it out.
Capital gains tax doesn't apply when you sell your main residence anyway, so you can forget about CGT from that. By the same token, holding onto it might present a problem in establishing Oz domicility (HMRC won't let go lightly - they'd ask why you were keeping hold of it). In any case, if you had argued successfuly for Oz domicility, you'd be liable to Oz tax on income received by her if you kept it and simply rented it out.
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I was told than some guys who went to Auz took thier pension funds and placed them offshore in jersey. allegedly no tax !! not sure whether to believe this one.
my question is if you leave before your 22yrs does anybody know if its correct that you can transfer your pension pot to Auz to finish out your term there !. i did read in a sunday paper you can as a civvy as long as you don't touch your fund before the date you would be accessing it over here, and if you did you would be liable to tax over here (uk)
my question is if you leave before your 22yrs does anybody know if its correct that you can transfer your pension pot to Auz to finish out your term there !. i did read in a sunday paper you can as a civvy as long as you don't touch your fund before the date you would be accessing it over here, and if you did you would be liable to tax over here (uk)
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There's nothing to prevent you from taking your military gratuity and investing that in an assurance or pension fund. As to whether you wanted to invest in offshore/hedge funds, well.. that would depend entirely on your attitude to risk. But there are far safer ways of avoiding tax, legally and safely.. and do you really want to risk your financial future on derivatives? Ask SocGen what they think right now about that. As to the pension, no idea.. sorry. I can't see there being much difference in the final figures either way though. You will be taxed on your pension though, when you get it, the amount will depend on your income. Again though, there are far better ways of mitigating tax and saving than simply sticking ot all in a pension fund. Traditional pension funds linked to annuities currently aren't doing so well because interest rates are so low. Have a chat with your financial guru, spread your risk and also, spread your pot with different fund managers - they'll all have a different outlook and that should smoothe out any wrinkles. DON'T GO TO YOUR BANK.
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Hueymeister
May I suggest that you talk to Paymaster - the outfit that pays Government pensions.
HMG reserves the right to tax "Government Pensions" in the UK NO MATTER WHERE YOU ARE RESIDENT.
My Military Pension and my Wife's Teachers Pension and State Pension are taxed in UK although we are resident in France.
Best of luck in your new life.
May I suggest that you talk to Paymaster - the outfit that pays Government pensions.
HMG reserves the right to tax "Government Pensions" in the UK NO MATTER WHERE YOU ARE RESIDENT.
My Military Pension and my Wife's Teachers Pension and State Pension are taxed in UK although we are resident in France.
Best of luck in your new life.
Cazatou,
My experience was that Paymaster had no interest in the state of my tax affairs. They just deducted tax as instructed by the Inland Revenue. Once the IR had decided I was no longer domiciled they just changed my tax code to zero tax and lo and behold, Paymaster stopped taking tax from my pension.
It will be the taxman who determines your liabilities.
My experience was that Paymaster had no interest in the state of my tax affairs. They just deducted tax as instructed by the Inland Revenue. Once the IR had decided I was no longer domiciled they just changed my tax code to zero tax and lo and behold, Paymaster stopped taking tax from my pension.
It will be the taxman who determines your liabilities.
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Someone earlier mentioned speaking to a professional regarding their position.
Anyone know of such a person in the UK that has knowledge of International Tax Law (esp Canada / USA) ?
Have a very complicated situation that I could do with some help with..
Anyone know of such a person in the UK that has knowledge of International Tax Law (esp Canada / USA) ?
Have a very complicated situation that I could do with some help with..
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Accountants....
Most reputable accountant agencies are quite well versed in UK tax law / Intl implications. The initial inquiry is often free - to determine your position and their interpretation / avenues to pursue. They will not of course give free advice, but will provide an honest opinion if they can assist. THey will also agrue with the IRS etc your case.
...personally, as an ex- foreigner, it will cost a little - but IMHO WELL WORTH it in peace of mind, and Factual advice.
...personally, as an ex- foreigner, it will cost a little - but IMHO WELL WORTH it in peace of mind, and Factual advice.
