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Tax treatment of foreign pension/superannuation payments

Initiate

Views 1198

Replies 4

Hi

I have a client who worked in the USA and accrued superannuation during that time.  The taxpayer has returned to Australia and is a resident.  The taxpayer received Form 1042-S Foreign Person's U.S. Source Income Subject to Withholding for pension payments paid from the Superannuation Fund.  There is no withholding and it has been confirmed that there should be no withholding.  Is any part of this payment taxable, i.e.

 - the whole payment;

 - the earnings in the fund to include those earnings as taxable (I don't know what this is);

 - none of it; or

 - other?

Taxpayer is over 65.

I would appreciate any assistance.

Thanks

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 1

Hi @Kelzer,

 

Thank you for your post. Some US pensions are looked at under Double tax arrangements as they may have had tax applied in the US. We have had a similar post about reporting US pensions in Australia. You can view our response here

 

Hope this helps.

 

Regards,

Jodie2.       

 

4 REPLIES 4

Former Community Support

Replies 1

hi @Kelzer ,

Ordinarily, foreign pension payments are taxable, if someone is an Australian resident for tax purposes (as income earned in Australia and overseas is usually assessable income). You can see Item 20 Foreign source income (2020) for more details.

 

However as quoted in the above webpage, "If you received a lump sum payment from a foreign superannuation fund. Some of these payments are taxable and some are exempt from Australian tax." (italics added). As I have not heard anything specifically about the pension in your client's situation, it may be worth considering calling the above phone number to double check whether this payment is taxable in an Australian tax return.

Initiate

Replies 0

Thank you, I have called , I have spoken to a few different levels of people and transferred to a few different departments and am now waiting to hear back from a DTA specialist.  

Most helpful response

ATO Community Support

Replies 1

Hi @Kelzer,

 

Thank you for your post. Some US pensions are looked at under Double tax arrangements as they may have had tax applied in the US. We have had a similar post about reporting US pensions in Australia. You can view our response here

 

Hope this helps.

 

Regards,

Jodie2.       

 

Initiate

Replies 0

Thank you