The taxation of UK pension income is dependent on your tax residency and visa status. The Double Taxation Agreement (DTA) between the UK and Australia determines where the income is taxable.
It is not a choice. Both UK lump sums and regular pension incomes may be taxable in either the UK, Australia or both.
We are able to advise regarding the taxation of UK lump sums and regular pension incomes in both the UK and Australia. We at GM Tax can also provide you with a comprehensive guide to your UK & Australian tax position when considering accessing or transferring your UK pension benefits to Australia.
For individuals whom are a permanent resident of Australia, under the terms of the DTA between the UK & Australia it is not correct to pay tax on your pension under PAYE in the UK, and to claim a credit for this UK tax on your Australian tax return. The UK pension is only taxable in Australia, (unless your visa permits you from reporting your foreign sourced income) and would be omitted from any UK tax return and included on your Australian return only.
