TAX PAYABLE

The information to make decisions and to calculate the tax payable comes from a Cash Equivalent Transfer Value (CETV) form which is supplied by the UK Fund administrator. We can facilitate this process - see information in Support Services.

A transfer within 6 months of Australian tax residency does not incur any tax on the funds transferred unless it is over the contribution caps.

After 6 months Section 305-75 of the ITAA 1997 specifies how the assessable part of the transfer value will be taxed.

The post 1st July 2004 formula for the assessable growth component is:

where:
Accumulated entitlement	=	The amount payable out of the paying fund immediately before the Relevant Day.
Relevant Day	=	The latter of the day before becoming an Australian resident and the day before becoming a member of the overseas fund.
Additional Contribution	=	Personal or employer contributions paid on or after the Relevant Day.
Transfer Amount	=	Transferable amount before any deduction is made from that amount.
Previously Exempt Amount	=	Sum of each of the amounts in respect of the relevant payment worked out under subsections (5) and (6) (basically transfers out to another eligible non-resident non-complying superannuation fund).
Resident Days	=	Number of days of actual residency from the time the person became a resident of Australia up to and including the day on which the payment was made.
Total Days	=	Number of days in period from and including the relevant day for the relevant payment, up to and including the day on which the payment was made.

All monies left in a UK investment vehicle other than those in an employer sponsored fund or monies less than A$50,000 fall under Foreign Investment Fund provisions. The full realised and unrealised gain in any year is assessable on one of three calculation bases. An attribution account needs to be maintained so that an offset can be claimed to ensure double taxation does not occur.

The level of reduction in assessable income is assumed in this case to be $0.

The provisions for the taxation of pensions received from overseas have not been altered and are contained in the ITAA 1936. In essence the overseas pension is included in the person’s assessable income – with a possible deduction for personal contributions, but no rebate.

The tax free threshold of $6,000, the tax free build up of the deferred pension in the UK, the Senior Australian tax offset etc mean that some pension from the UK may not be greatly disadvantaged to the tax free status of post age 60 Australian income streams.