UK And Australia Double Taxation Avoidance Agreement

The UK has an agreement in place with 120 countries across the world concerning the number of Brits who are receiving a wage through their jobs. The Double Taxation Avoidance Agreement is in place so that workers are not taxed on their earnings from their home country and the land in which they work.

To put it simply, it protects the individual from being taxed twice.

Australia is one of the countries that are in agreement with the UK, and for the many British expats in the country, this is an added incentive to live and work Down Under.

Double Taxation treaties are also designed to:
• Provide certainty of treatment for cross-border investment and trade
• Prevent excessive taxation of UK business interest abroad and other forms of discriminations
• Protect the government’s taxing rights
• Protect against tax evasion

The UK has the biggest network of treaties that spans across the world with double taxation agreements in place with countries that include Argentina, Japan, Bahrain, China and of course Australia. The agreements with each country hold different terms.

Guide For Brits

The general rule is, to be considered a UK resident, you will need to have been abroad for less than 183 days in a tax year, or have spent an average of 91 days per year in Britain over a 4-year period. This is for tax purposes only. To take advantage of the double taxation avoidance agreements, you must apply to the foreign office in Britain.

The benefits of doing this are greater than avoiding double taxation on your income. After registering with the foreign office it will ensure that your pension is paid in gross and that you receive relief from British tax on interest, dividends and royalties.

In the event that you are about to relocate overseas it is necessary to notify the Tax Man by filling out the P85 form from the Inland Revenue. Upon your permanent return to the UK you will need to announce this to your bank.