Immigration Forum / Australia and NZ / September 2005

1.  There is a difference between permanent residence and tax residence.
   Visit the ATO website for tax residence information:
   http://www.ato.gov.au

2.  If they become tax resident then all worldwide income is taxed,
   whether brought into Australia or not.  There may be reliefs and
   double tax credits available - seek professional advice.

Jeremy

Alex,

- As Jeremy says their residency status for tax purposes is separate to
 their status for visa purposes.  In other words you can be resident
 for tax purposes while you are living in Australia as the holder of a
 long term temporary residency visa.

- The ability to be able to transfer a UK pension fund into an
 Australian superannuation fund is usually contingent on whether the
 UK pension fund trustees are happy that you have permanently
 departed the UK.

- Once you have become a tax resident of Australia you are liable to tax
 on your worldwide income, including UK source pension income.
 Further, under the UK-Australia Tax Treaty only the country in which
 you are tax resident has the right to tax the pension income => once
 your parents have moved to Australia there will be some forms to
 complete to ensure their UK pensions are properly taxed.

- Note that there may be a tax deduction available in Australia if they
 have made personal pension contributions (this is a deduction for what
 is called the Undeducted Purchase Price).  There is also a deduction
 available for any UK State Pensions they receive after they have
 become tax resident, of an amount equal to 8% of the annual State
 pension received.

Best regards.