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Which Exchange Rate for UK Preserved Pension Lump Sum

Newbie

Views 97

Replies 2

Hi,

I left the UK to live in Australia in 2008 and have a preserved UK company pension. The lump sum is now able to be accessed. I understand the tax payable in Australia is on the growth of the lump sum between 2008 and now. I was wondering if you need to use the 2008 Sterling to Dollar exchange rate for the sum when I left the UK and the 2021 exchange rate for what it is worth now. I guess The growth between the two sums would then be taxable in Australia. Thanks 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 1

Hi @Janner

 

The way you calculate the growth depends on when you became an Australian Resident for tax purposes. We have a previous thread that answers a similar quesiton on this that would be worth reading. Our response provides information on calculating your growth amount. To answer your question, you would need to calculate the value at the point in the time you became a resident for tax purposes. This would be done using the exchange rate at that point in time. 

 

Hope this helps, let us know if you have any questions. 

2 REPLIES 2

Most helpful response

ATO Community Support

Replies 1

Hi @Janner

 

The way you calculate the growth depends on when you became an Australian Resident for tax purposes. We have a previous thread that answers a similar quesiton on this that would be worth reading. Our response provides information on calculating your growth amount. To answer your question, you would need to calculate the value at the point in the time you became a resident for tax purposes. This would be done using the exchange rate at that point in time. 

 

Hope this helps, let us know if you have any questions. 

Newbie

Replies 0

Hi Ethan,

Thanks for that, I became a resident for tax purposes as soon as I arrived in Australia in 2008. The exchange rate for Australian Dollars was stronger in 2008 than now so the growth is now relatively small.