Emigrating to Aus - What about the Pension?

[maxburner]

To Kilo and Toom,

Thanks for the info.

[tengah chum]

madasacow

Are you planning to enter Oz on a retirement visa?

If so have you had any details on private health insurance.
I would be interested in any info as I'm also considering getting out of Mr Blairs vision of eutopia

[G.Khan]

MedibankPrivate

Tengah Chum:

I am down here on a retiree visa. I was required to show satisfactory medical insurance BEFORE they would issue the visa.

At that time, (last year), MedibankPrivate were the only large health Insurance company in Australia who would issue cover acceptable to Australian Immigration dept. BEFORE I physically arrived in Australia, (nearly a Catch22!).

There may be others now.

MedibankPrivate, GPO Box9999,Melbourne, Victoria 3001.

also at: http://www.medibankprivate.com.au

Cheers and good luck,

GK

[MightyHunter]

Australian Tax

The thing to be careful about is the Australian marginal (top) rate of tax is 48.5%. If you pay tax on your UK pension in the UK, the Australian Tax Office will charge you the diff between the UK and Oz rates. If you elect to pay no tax in UK, ATO will charge you the full rate.

UK Armed Forces Penson System will pay (I believe) annual increases from age 55.

Australian Tax system somewhat different to UK - everybody here needs an accountant! Strongly recommend professional advice.

[madasacow]

tengah chum

Sorry to take so long replying. I am aiming for a 'Skilled-Australian Sponsored' visa as we have the right kind of family there (and I ‘aint that old!!).

I have also just started making enquiries with financial advisors to try and make sure I don’t get stitched up by the tax system of either country! Things are just a little more complicated that you first think! :o

Regards
MAAC

[ijp471]

Madasacow
I am no expert and a little out of date, but I have jumped through most of the hoops, so thought I would share some of my ideas with you. Seems pretty consistent with what's been discussed here although there are obviously some creative ideas out there.

Your service pension will remain linked to the UK inflation index and added to any Australian income and any other 'worldwide income' you may have and taxed accordingly - at Australian rates. This is not necessarily a good thing as Oz rates are quite high, rather they cut in at relatively low income levels, but there is not much you can do about this I believe.
As far as I am aware, Paymaster needs to pay into a UK (or CI) bank account although this would appear to contradict some posts here. Possibly the best thing to do is to open a UK bank account BEFORE you leave UK - it is very much harder to do so from overseas, with the tightening of banking regulations (post 911?) but ensure you have VISA or some other Debit Card access, then as someone else pointed out it is a simple matter to transfer money at your convenience.
As far as the OAP goes, it will not be index linked after you start taking it at 65. This has been the suject of many court challenges and emotive rhetoric but IMHO will never change - the UK cannot afford to foot the bill. There was a recent High Court challenge from someone in SA, I believe, which got nowhere. Of course you can delay taking it, this might be beneficial if you didn't really need it and were in the middle of ultra high inflation, for example. Otherwise I think it is just a fact of life.
Having said that, I would highly recommend the move if you pick the right part of the country (no comment on this Although the tax imposition is high, the cost of living is, conservatively, 30% less and your pension(s) will go a long way.
As way of a disclaimer, I do not claim to be a qualified financial adviser - these points are as a result of personal experience.
Bon Voyage!

[Stan Bydike]

I have seen conflicting information here about the taxation of a service pension.

The tax books I have seen indicate that HMG will tax a UK service pension at UK rates if you move overseas, irrespective of any double taxation treaties.

Can any provide any evidence otherwise.

The country I am thinking of moving to has no Income Tax!!

Edited to add the following:

BTW has anyone heard anything about the proposed US retirement Visa

[tengah chum]

G Khan

Thanks for the info ,it was very useful.

madasacow

Sorry if I assumed you were retiring , I have an awful habit of assuming everyone is as old and decrepit as myself.

[madasacow]

Thanks to all for the replies.

I have been doing a little investigation for myself on the newsgroups and in particular the misc.immigration.australia+nz newsgroup which is very helpful on both general migration issues and many specifics. Check it out if you are thinking about jumping ship down under.

There are several sites offering financial advice and assistance for those moving to Auz. Having read a little about the differences between the Tax systems I am convinced that I will need to bite the bullet and pay for some advice. Hate to do it but I am convinced a few hundred pounds of advice now may save much more in the future. Problem now is how to choose between the advisors!

ijp471
Thanks for the personal experiences. Always worth hearing how someone else made out even if you may not be officially licensed to give financial info Having been over there a couple of years ago (and off there again at Christmas) I can agree with your Cost Of Living assessment. Unfortunately, the tax system counts your worldwide income when assessing your tax liability but any UK tax paid will be taken into account.

Stan Bydike
I haven’t seen any details to confirm or deny the UK taxation of service pensions. However, if you are resident for tax purposes in another country I can’t see why they would tax it in UK but kilo52 may have a point. Seek professional advice.

tengah chum
I may be (feel) decrepit but I’m not that old

Regards
MAAC

[TheNightOwl]

Madasacow: I'm ex-RAF (SNCO), and have lived in Oz since 1983. My Service pension is paid to me here, by cheque drawn on HM Paymaster-General, every month. I see to the exchange and banking, and DO NOT pay UK Income Tax. I was given the option of a direct transfer to my bank account, but chose to keep it this way some years back.

Pension IS index-linked, and is added to Oz income for total annual earnings for tax liability calculations. Oz tax rates are bloody awful, top rate 48.5%, INCLUDING 1.5% Medicare levy. As has been said, the cost of living here is much lower than UK, hence the exchange is, usually, to our distinct advantage here. My pension goes a long way!

The UK Age Pension is NOT index-linked for ex-pats in Oz, it has been a bone of contention between the respective governments for a long time past, and I doubt it will ever be resolved to our benefit.

Hope this is of help, and I wish you well if you do decide to jump. Just remember the state of Oz aviation, if that is your intent, BE CAREFUL!!

Kind regards,

TheNightOwl.