Foreign income question

stmatt

Hi

My OH worked in Australia Jan 2008-2009. He has just had his accountant do his tax return for 2008-2009 and I'm a bit worried about how its been done. The Australian income had tax paid in Australia. His accountant has used this income in his UK tax return although I'm not sure how since exchange rates are so variable.

Can somebody confirm to me how tax should be calculated in these circumstances as I always thought we had recipricol tax agreements which meant that if we paid tax in Oz then we didn't pay it here?

Many thanks

Stmatt

dzug1

Reciprocal tax agreements don't necessarily mean no tax.

What happens is that the Oz income is included with the UK income and the overall tax due calculated.

Then the Oz tax is offset against the tax due so that you are not paying twice.

stmatt

Ah, okay I've done some searching and worked out that we just get a tax relief to stop us paying 2 lots of tax. I've found out which exchange rate ot use to change dollar salaries into sterling income.

However, does anyone know how we work around the fact that the UK tax year is April to April and Australia is October-October.

Thanks
Stmatt