Australia to the UK - Tax Implications

[baswitzer]

Hello all.

I am presently relocating from Oz to the UK where I intend to work. I am in the process of sorting out my spouse settlement visa now and I am intending to live permanently in the UK with my spouse. I am having trouble working out whether I have to pay both UK and Australian taxes for my income derived from the UK. Can anyone fill me in on the arrangements for Australian tax for Aussies working abroad?

[PaperPusher]

Just a question, but won't your main home be the UK? By seeking settlement aren't you making the UK your only/main home?

How I understand it, you are deciding not to be Aussie anymore (as far as where you home is, but not what you feel).

I can't see a reason why you should pay taxes in both countries. The experts and gurus may elucidate more.

PP

By the way I have been thinking about the "Malaysia my second home" scheme!!! Penang here I come

[ubugger]

Check the ATO website...

Basically it goes something like: if you intend on making the other country (uk) your main home then you only have to pay tax in the UK. However if you are going for less than a 90 day period then you have to pay australian tax, not UK tax. You will only get taxed once, not twice. Although i'm making the same move next year on HSMP but i'm not 100% sure if you have to pay australian tax for the first 90 days or if you just pay UK tax the whole time. But yeah, check the ATO website, it's all there

[Dawie]

Well, the Australian tax authorities have no way of knowing that you have earned anything in the UK anyway unless you feel like telling them.

[OL7MAX]

I wouldn't bet my life that the UK and Australia will never share tax information.

[Dawie]

Well under the Data Protection Act they are not allowed to.

[OL7MAX]

In the longer term rules don't apply to arms of government for the simple reason that legislation can be changed. And changed with retrospective effect! There have already been several amendments to the DPA (including to comply with directives from the EU). And big increases in powers to HMRC. There will be many more of both.

When it comes to tax collections, governments are very proactive. In fact, this government has demonstrated time and time again that it will go to extreme lengths to get the whole pound of flesh. That includes doing data sharing deals with erstwhile tax havens like Jersey. The penalty for under-declaring £1 in tax is more than the penalty for violent rape. You are entitled to place whatever faith you want in the DPR but anyone wanting to shelter earnings/assets outside of the tax system would be better off in places where the government guarantees anonymity. Australia and the UK don't.

Not that the OP has any such intentions, of course.

[judy7007]

Made the same move 18 months ago. Basically we were considered resident (for tax purposes) in the UK from the day of entry and paid UK tax from that date. Paid Oz tax up until that date - there is a box on Oz tax return to declare from which date you become a non resident.

As long as banks etc in Oz are notified you are no longer resident (they then take 10% withholding tax from your interest), there should be no need to put in an Oz return after that first year (the one during which you become non-resident). It is different if you have a rental property in Oz.

A lot of data sharing goes on re tax BTW, especially between countries with a double tax agreement such as Australia and the UK. The ATO website is helpful, Revenue and Customs here were extremely helpful to us in answering lots of questions by email and the local tax office really helped us too. We find it all much easier than in Oz where accountants seems to deal with tax returns.

[sakura]

Hello all.

I am presently relocating from Oz to the UK where I intend to work. I am in the process of sorting out my spouse settlement visa now and I am intending to live permanently in the UK with my spouse. I am having trouble working out whether I have to pay both UK and Australian taxes for my income derived from the UK. Can anyone fill me in on the arrangements for Australian tax for Aussies working abroad?

Just curious - are you coming here on a visa? Since you state that you're planning to live here parmanently....do you have a work visa valid for the whole period leading to ILR?