Most foreign pensions and annuities are taxable in Australia, even if tax was withheld from your payment by the country from which the payment came.
You may claim a foreign income tax offset at this section if:
- the country from which your foreign pension or annuity came withheld tax from your payment
- you were not entitled to seek a refund of the foreign tax from that country, and
- the foreign pension or annuity is also taxable in Australia.
If your foreign pension or annuity is not taxable in Australia, do not show it anywhere on your tax return.
UPP of a foreign pension or annuity
You may be entitled to claim a deduction if your pension or annuity has a deductible amount of undeducted purchase price (UPP). Only some foreign pensions and annuities have a UPP. The UPP is the amount you contributed towards the purchase price of your pension or annuity.
If you do not know your deductible amount, read More information. If you need information or assistance with this section, phone 13 10 20.
Answering this question
You will need the details of your foreign pension or annuity. All foreign income, deductions and foreign tax paid must be converted to Australian dollars before you complete this section.
Completing your tax return
1. Enter the:
- gross income amount (If you had foreign tax taken from your pension or annuity, add the amount of foreign tax to the amount of pension or annuity you received.)
- deductible expenses. Include any deductible expenses that you incurred in gaining your foreign pension or annuity, excluding any debt deductions – such as interest and borrowing costs. Do not include your deductible amount of UPP amount here.
We will work out the assessable amount by subtracting the deductible expenses from the gross income amount.
2. Does your foreign pension or annuity have an UPP?
- If not, leave this field blank.
- If yes, enter the deductible amount if you know it. If you do not know your deductible amount and have completed a Request for a determination of the deductible amount of UPP of a foreign pension or annuity, leave this field blank. We will address your request in a private binding ruling. If you need information or assistance with this section, phone 13 10 20.
3. Will you claim a refund of foreign tax paid from the country which paid your foreign pension or annuity?
- If yes, leave this field blank.
- If not, enter the foreign tax paid (in Australian dollars). If the total of your foreign tax paid is more than $1,000 you will need to calculate and enter the maximum you can claim from us.
4. Click on 'Save'.Instructions on completing your individual tax return using myTax.