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Income Tax on a UK Age Pension received in Australia
When you retire in Australia, and also receive a UK pension, this pension will be included in your taxable income, and taxed at normal rates, based on the tax band you are in..
Unlike normal income, where tax is deducted from each pay, the tax due is calculated at the end of the tax year, when you submit your Tax return, normally between July and October each year.
So, you may face an extra tax bill based on that income, depending on your total income, at the end of the tax year.
I am guessing that the Australian Tax Office [ATO] will be notified by the UK, of the amounts you receive, in the same way that Centrelink is notified automatically of that income to you. This will be confirmed when you do your first tax return. and see what information is already pre-populated in the return.
The Actual pension you receive is converted from GBP to Australian Dollars at the rates used by the ATO, even if it is different to the actual amount you received
Not Related to the Tax aspect, but maybe of interest, the actual GBP-AUD Exchange Rates used for receipt of the UK pension into Australia in 2017-18 have been:
- 1.641700000 – 14 August 2017
- 1.626298776 – 11 September 2017
- 1.679548603 – 9 October 2017
- 1.689332718 – 6 November 2017
- 1.771271069 – 4 December 2017
- 1.732105749 – 27 December 2017
- 1.759466636 – 30 January 2018
- 1.770462942 – 26 February 2018
- 1.816439621 – 23 March 2018
- 1.815314015 – 23 April 2018
- 1.789338490 – 21 May 2018
- 1.760563380 – 18 June 2018