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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15914
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a U.K.resident earning income in U.K. and I am also getting

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I am a U.K.resident earning income in U.K. and I am also getting some interest income in Australia from a term deposit account (held in my Australian Bank A/c) from which some withholding tax is taken off each month (10%) on the interest earned.
Could you please advise in which country I need to fill in a tax return and can I claim the Australian witholding tax back if I don't reach the tax allowance.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. How much is the interest in a full tax year? Are you a higher rate taxpayer?
Customer: replied 1 year ago.
The Australian dollar interest will be approximately $12,000 (£6000) and my English income will be approx £9000 per year which will put me just over the tax free allowance.
Customer: replied 1 year ago.
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Expert:  TonyTax replied 1 year ago.
As you are a UK tax resident, you are taxable on your worldwide income unless you are non-UK domiciled and choose to use the remittance basis of assessment which you can read about in section 9 of RDR1 here. According to Article 11 of the UK/Australia tax treaty here, the interest will be taxable in Australia at a maximum of 10% and if you choose to be taxed on your worldwide income in the UK, you will be able to deduct the Australian tax from your UK tax liability. I'm not an expert on the Australian tax system so whether you can claim the tax back or not by using a personal allowance, I cannot say. The UK tax system allows non-UK resident nationals to reclaim tax earned in UK banks. You should register for self-assessment given the amount of the foreign income unless you wish to be taxed in the UK only on remittances of non-UK income to the UK. You can register here. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks Tony
From what I understand from your reply I will be able to deduct my withholding tax paid in Australia (10%) from my
liability as per the U.K./Australian tax treaty.
In my case there would not be too much liability as I will be taxed at 20% over and above the tax free allowance.
If however I do not reach the tax free allowance with both my sources of income do you think I could claim the Australian withholding tax from my U.K.assessment return
Expert:  TonyTax replied 1 year ago.
You can never get back tax paid in Australia from HMRC in the UK nor vice versa. The UK government doesn't have that money, the Australian government does.
Customer: replied 1 year ago.
Ok that makes sense but just to confirm under the tax treaty I can reduce my liability by the witholding tax paid on my Australian income which I will be including in my U.K. tax returns
Expert:  TonyTax replied 1 year ago.
Yes, you can.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thanks Tom for your answers.That has helped a lot and put my mind at rest.
Customer: replied 1 year ago.
I have given an excellent rating

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