UK Social Security Pension
Desley Revell
Recently in some of the BAPA emails, someone stated that they claim a percentage on their Income Tax for the UPP.
I was asking our accountant, and they have advised that they have never seen this and report our pension as a pension without UPP.
Any information would be greatly appreciated.
Desley Revell
Brisbane
Paul Swain
Check the posts here https://groups.google.com/g/bapanews/c/Afj0qQ3FkIg
in particular this one
https://groups.google.com/g/bapanews/c/Afj0qQ3FkIg/m/8DprD60cDgAJ which
includes the link to the ATO advice and another link setting out the way
that pensions are classified.
Your accountant should now be able to correct any past Australian tax
returns so that the UPP is taken into account for all the past years, as
well as claimed in your future tax returns.
Paul
JO ODDIE
Taxation of British pensions in Australia
If you received a pension from the United Kingdom State Pension (previously known as the British National Insurance Scheme), you may be entitled to a UPP deduction.
For a category A pension or a category B widow's pension, you can calculate your deduction by multiplying your UK State Pension (in Australian dollars) by 8%. If you want your UPP calculated using the Exact method, you will need to write to us and request a private binding ruling.
If you received a category C or D pension you are not entitled to a deductible amount of the UPP.
Categories of British State Pensions
The categories of contributory SP available are:
- Cat A - category A pensions, comprising basic and additional pensions, are paid to individuals based upon their qualifying NI contributions. In certain circumstances, spouses and civil partners were able to inherit these when the principal recipient died.
- Cat B - category B pensions, comprising basic and additional pensions, are paid to the surviving spouses and civil partners of deceased category A recipients where the survivor is not entitled to category A pension.
- Cat ABL - category ABL pensions are paid to married persons and civil partners when a person’s own category A basic pension is less than the maximum amount payable and they are able to ‘top up’ using their spouse or civil partner’s NI contributions.
- Cat BL - category BL pensions are paid when a person has no category A basic pension entitlement but can claim an SP using their spouse or civil partner’s NI contributions.
- Cat AB - category AB pensions are paid when a person’s own category A basic or additional pension is less than the maximum amount payable and they are able to ‘top up’ using their deceased spouse or civil partner’s NI contributions.
- GRB only
The categories of non-contributory SP are:
- Cat C - category C pensions are payable to people over SPa on 5th July 1948 and their widows – the only remaining entitlements are payable to widows.
- Cat D - category D pensions are awarded to people who:
- reach 80 years of age
- satisfy certain residency conditions and
- failed to qualify for category A or B pension or
- receive less by way of basic pension than the rate of Category D pension.
On 14 Feb 2021, at 20:04, Paul Swain <ata...@zaparaxy.net> wrote:
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JO ODDIE
On 14 Feb 2021, at 20:08, JO ODDIE <joo...@aol.com> wrote:
Derek Russell
elle...@gmail.com
Hi Derek
I just went through this recently so I can tell you the bad news.
The 8% is for state pensions only. Some private pensions may have UPPs but these are only for additional voluntary contributions where you did not get a tax benefit. (This is what they describe as “personal contributions” on the ATO website.) Not regular contributions by employer or from pay.
It seems crazy unfair as any contributions made are simply a return of your capital, not untaxed earnings. (Of course all of it would be tax free if in super in Australia (which got a tax benefit on contribution).
I went through the UPP request process and I checked the actual tax law once they told me I was not entitled to a UPP as the ATO website is a little misleading.
Unfortunately I can’t find the reference again now 🤷🏼♀.
I’d suggest calling the ATO. If you get a different answer please let me know. It seems (again) to be a very unfair bit of tax law for overseas pensioners.
Kind regards
Ellen
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JO ODDIE
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elle...@gmail.com
Hi Jodie
Which offset is being removed ? LMITO or another ?
Cheers
Ellen
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JO ODDIE
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Derek Russell
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