Australian pension transfer back to UK

Nothcirc

Hello - I reached my preservation age (58) this month, transferred my Australian pension account back here to the UK - I have just received a letter from the Australian fund stating they have withheld some $30k and I need to submit an Australian tax return. I left Australia over 8 years ago & have not submitted a tax return since- I have been completely UK based all this time.  I thought this was a tax free lump sum ?? any help or guidance would be hugely appreciated as this is totally hit me out of the blue...

xylophone

https://www.exfin.com/australian-expat-tax-faqs#:~:text=Under%20Australian%20tax%20rules%20you,the%20exception%20of%20New%20Zealand.
Under Australian tax rules you cannot currently transfer your Australian superannuation to your UK, or to any other overseas fund with the exception of New Zealand. You also need to reach preservation age and satisfy a condition of release, which generally means that you are aged 57-65 and retired, to be able to access your super.

https://community.hmrc.gov.uk/forums/customerforums/pt/9781d978-b242-ea11-b698-00155d9c7b1d
Hi,
There is no provision in article 17 of the tax treaty between UK/Australia to exempt a pension lump sum from tax in the country this arises. Therefore if the pension is taken as a lump sum this will be taxable in Australia and paragraph 3 of article 20 permits taxation of this in the UK.

https://www.taxation.co.uk/articles/australian-superannuation-funds-and-uk-pensions
This seems a complex area - you may need expert advice.

Tassie_Devil

Nothcirc said:

Hello - I reached my preservation age (58) this month, transferred my Australian pension account back here to the UK - I have just received a letter from the Australian fund stating they have withheld some $30k and I need to submit an Australian tax return. I left Australia over 8 years ago & have not submitted a tax return since- I have been completely UK based all this time.  I thought this was a tax free lump sum ?? any help or guidance would be hugely appreciated as this is totally hit me out of the blue...

Your super fund balance will be made up of two components, a taxable sum and a tax-free sum, the proportions of which depend on the source of the contributions that have been made (concessional vs. non-concessional).

Super withdrawal is only completely tax-free once you reach 60. Reaching your preservation age just means that you can access it.

This article explains some of that: https://moneysmart.gov.au/how-super-works/tax-and-super

This article goes into a bit more detail (it's a reply to a query from somebody aged 57 but it applies equally to age 58): https://www.superguy.com.au/superannuation-rules-for-over-57/

It sounds like your super fund provider has withheld a sum against a possible tax liability on your part.

Any super fund withdrawals made whilst you are a UK resident for tax purposes count as part of your world-wide income. Both the UK and Australia are participants in the Common Reporting Standard: https://en.wikipedia.org/wiki/Common_Reporting_Standard

Julia62

How dud you manage to transfer your Australian pension to the UK I am trying to do this but I can only draw this if I retire and work less than 10 hours a week?? I  past my preservation age just turned 60
I would welcome any feedback

xylophone

How dud you manage to transfer your Australian pension to the UK I am trying to do this but I can only draw this if I retire and work less than 10 hours a week?? I  past my preservation age just turned 60
I would welcome any feedback

 Anything relevant here?

https://www.exfin.com/australian-expat-tax-faqs#:~:text=Under Australian tax rules you,the exception of New Zealand.