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HMRC internal manual

International Manual

DT Agreements: Australia - Income from a UK source paid to a resident of Australia

UK pensions and annuities paid to a resident of Australia

Important change from 1 July 2006

From 1 July 2006 Australia will no longer tax UK pensions paid to individuals living inAustralia who hold Temporary Resident Visas.

Australia has changed its law to exempt from Australian tax the non-Australian income ofindividuals who hold Temporary Resident Visas. Article 23(2) of the 2003 Conventionprovides that where an individual is exempt from tax by virtue of being a temporaryresident of Australia, then the relief to be allowed under the Convention in the UK shallnot apply to the extent that income (which includes pensions) or gains are exempt from taxin Australia. This means that

  • When you are dealing with claims for treaty benefits from residents of Australia you will have to check that the person has been admitted to Australia for permanent residence.
  • From 1 July 2006, relief from UK tax is not available to holders of Temporary Resident Visas.

This change applies to all pensions: occupational, government and state.

From 1 July 2004: Article 17 of the 2003 Convention

Full relief is available in respect of any pension or annuity from a UK source paid to aresident of Australia, including UK government pensions.

Before 1 July 2004: Article 14 of the 1968 Agreement

Full relief is available in respect of any pension or annuity from a UK source paid to aresident of Australia, including UK government pensions.