Closing ltd company and returning to Australia

[eng123]

If I leave the UK permanently part way through the UK tax year to return to Australia, do I still get the £34000 lower tax rate limit (equivalent of the whole year) or is it pro-rata'd?

If I get the full year's entitlement, I guess it would make sense for me to pay the rest of my dividends up to this limit (assuming I have enough to cover all expenses, VAT corp tax etc) before the Australian tax year starts on 1st July. This way it wont fall under the new Australian tax year when I will be earning in Australia.

Does this logic make sense?

thanks in advance for any advice

cheers
nick

[Gonzo]

If I leave the UK permanently part way through the UK tax year to return to Australia, do I still get the £34000 lower tax rate limit (equivalent of the whole year) or is it pro-rata'd?

If I get the full year's entitlement, I guess it would make sense for me to pay the rest of my dividends up to this limit (assuming I have enough to cover all expenses, VAT corp tax etc) before the Australian tax year starts on 1st July. This way it wont fall under the new Australian tax year when I will be earning in Australia.

Does this logic make sense?

thanks in advance for any advice

cheers
nick

The lower tax limit in the UK will not be pro-rated. You will still need to submit a UK tax return for the period 6th April - the date you became non-resident.

If you are intending to become Australian resident in the following tax year after 1st July then yes, your approach does seem to make sense to me. Of course, I have no idea how the Australian government will treat overseas earned income.

But then, I am not an accountant. You need to speak to a specialist, your usual accountant will probably not want to advise you on Australian tax matters.

[BigTime]

HMCE have a form for you to fill in when you leave the country with a simple explanation of how it works. I believe if you left the country on 6 April you'd still get a full year entitlement.

[eng123]

Thanks for the replies!

I have confirmed with the tax office that you get a full years entitlement if you leave part way through the year.

From what I understand the Australian gov treats foreign income as part of your taxable Australian income. Im however not sure whether the foreign income is taxed in Australia or if it just is added to your total income and therefore drives up the tax bracket of your earnings in Australia? Does anyone know?

[badbarry]

Foreign and domestic income are not distinguished in Australian taxation law, it is solely down to whether you are a resident or not.

Additionally double taxation rules mean that tax receipts from the UK will be offset against the Australian taxation. This is it in essence anyway.

In any case you should only be resident for the purposes of Australian taxation from the date you arrive.

I do not believe that they will consider your income prior to your arrival date, they have specific laws to consider these matters so it's worth looking at them in detail.

[SueEllen]

Thanks for the replies!

I have confirmed with the tax office that you get a full years entitlement if you leave part way through the year.

From what I understand the Australian gov treats foreign income as part of your taxable Australian income. Im however not sure whether the foreign income is taxed in Australia or if it just is added to your total income and therefore drives up the tax bracket of your earnings in Australia? Does anyone know?

The UK has a double taxation treaty with Australia. If you are in the UK and google Double Taxation Treaty Australia lots of information comes up.