Question for them that's retired and live overseas.
Nemo Me Impune Lacessit
Join Date: Jun 2004
Location: Derbyshire, England.
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I live in Australia on a long stay Temporary Residents visa and do not require to declare overseas income to the Australian authorities that is taxed in UK.
I get the benefit of the UK tax free allowance applied to UK earnings and the Australian tax free allowance on my Australian income. It may not pay to go for the tax-free in UK option if the tax payable in, say, NZ is going to be higher than splitting tax paid between the two countries.
In several countries, Australia included, the UK pension stays frozen at the date it was first drawn or you leave the UK, whichever is the later.
I get the benefit of the UK tax free allowance applied to UK earnings and the Australian tax free allowance on my Australian income. It may not pay to go for the tax-free in UK option if the tax payable in, say, NZ is going to be higher than splitting tax paid between the two countries.
In several countries, Australia included, the UK pension stays frozen at the date it was first drawn or you leave the UK, whichever is the later.
Join Date: Sep 2007
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I will be leaving the RAF and the UK in the next couple of years to live in the US. Do any ex-military US-based Ppruners know how the lump-sum gratuity is treated for tax purposes in the US. It is clearly tax free in the UK but I don't want to find out that on moving to the US, the IRS think that a large proportion of it belongs to them?
Join Date: Feb 2001
Location: Melbourne, Australia
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I left the RAF and the UK in July, 1983, after 22 years in the mob.
My Service Pension is paid to me here, by cheque, and I bank it when the exchange rate is most beneficial to me. The problem with this is that, with the Aussie dollar so strong wrt the US dollar, my pension value changes monthly. It is index-linked to the UK CPI, which means a slight annual increase, except in 2010 when there was no increase at all as the CPI was negative.
I have an entitlement to a UK Age Pension, which is pegged (no increase EVER) to the rate at the time I left the UK. This is paid directly into my account here, at the rate decided by the authorities - I had no option about this.
I do not pay UK tax and, when I told the Australian Tax Office that I would avoid Aussie tax by having my pension paid into a UK account, I was told, in no uncertain terms "...after you have paid your eligible UK tax, then we will charge you Aussie tax-rates on the rest..."!! At that point, I gave in.
Edited to add that I am an Aussie, as well as UK, citizen.
Hope this is some help.
Kind regards,
The Night Owl.
My Service Pension is paid to me here, by cheque, and I bank it when the exchange rate is most beneficial to me. The problem with this is that, with the Aussie dollar so strong wrt the US dollar, my pension value changes monthly. It is index-linked to the UK CPI, which means a slight annual increase, except in 2010 when there was no increase at all as the CPI was negative.
I have an entitlement to a UK Age Pension, which is pegged (no increase EVER) to the rate at the time I left the UK. This is paid directly into my account here, at the rate decided by the authorities - I had no option about this.
I do not pay UK tax and, when I told the Australian Tax Office that I would avoid Aussie tax by having my pension paid into a UK account, I was told, in no uncertain terms "...after you have paid your eligible UK tax, then we will charge you Aussie tax-rates on the rest..."!! At that point, I gave in.
Edited to add that I am an Aussie, as well as UK, citizen.
Hope this is some help.
Kind regards,
The Night Owl.
Nemo Me Impune Lacessit
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hello1 - If you time your move to the USA to arrive on or after the first day of their new tax year, having already been paid your gratuity lump sum in the UK, then I would have thought you could legally avoid USA tax on it?
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Thanks for your tips - I had considered the arrival after the 1 Jan start of the US tax year but as I will be leaving in March, this is slightly tricky! I will sit down with a US accountant in the next few months and talk things through.
Join Date: Dec 2002
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Would be interested to hear what comes of it hello1. I'd have thought that as long as the gratuity is paid before you become resident, then you're ok. Taken to it's extreme, you're not paying tax on the money you are earning now ?
Join Date: Dec 1998
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The Night Owl & Parabellum
As there is a dual tax agreement with Oz, you are required to declare all UK income regardless of whether it is taxed in the UK or not. If is is taxed in the UK, the amount of tax paid is taken into account by Oz and you do not have to pay any more if the amount of tax paid is equal to or greater than you would pay in Oz.
HPT
As there is a dual tax agreement with Oz, you are required to declare all UK income regardless of whether it is taxed in the UK or not. If is is taxed in the UK, the amount of tax paid is taken into account by Oz and you do not have to pay any more if the amount of tax paid is equal to or greater than you would pay in Oz.
HPT
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Moved to the US in 2005, I had my redundancy/gratuity paid into a UK building society. Subsequently decided to have my pension paid into the same...the interest rates were pretty good back then. I use a Visa from the same society, they do not charge me any extra for the transactions but the exchange rate does change. If I need large amounts of cash, I have it wired to my US bank account for a nominal fee.
