Australian taxes for Brits: the UK link and pensions

Once you live in Sydney, the Australian Taxation Office taxes you as a resident, HMRC mostly lets you go, and a 2003 treaty settles who gets the rest.

The short version

Australia decides tax residence with its own tests, starting with whether you "reside" there. Most Brits who move to Sydney to live become residents quickly [1].
Residents pay nothing on the first AUD 18,200, then 16%, 30%, 37% and 45% in 2025–26, plus a 2% Medicare levy. The 16% band drops to 15% in 2026–27 [2].
The Australian tax year runs from 1 July to 30 June.
On the UK side, tell HMRC you've left (form P85) and check the Statutory Residence Test. UK rental income stays taxable in the UK.
The UK–Australia double taxation convention has been in force since 17 December 2003 [4]. Your UK State Pension is paid in Australia but frozen [5].

Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = AUD 1.9363).

Are you an Australian tax resident?

The ATO's tests are different from the UK's Statutory Residence Test, and they don't depend on your visa. You can be a tax resident without being a citizen or permanent resident [1].

The resides test. This is the main one. "If you reside in Australia, you're an Australian resident for tax purposes" [1]. The ATO looks at your physical presence, your intentions, your family, work and business ties, where your assets are, and your living arrangements. Move to Sydney with a job, a lease and the family, and you'll almost certainly pass.
The domicile test. If your permanent home is in Australia, you're resident unless the ATO is satisfied your permanent place of abode is elsewhere [1].
The 183-day test. Present for more than half the income year usually makes you resident, unless your usual home is abroad and you don't intend to live in Australia [1].

Residents must declare all their income, from Australia and overseas [1]. So your UK rent, savings interest and pensions all go on your Australian return, with credit for UK tax under the treaty where it applies.

Temporary residents

There's an important exception for people on temporary visas. If you hold a temporary visa (such as a Skills in Demand 482) and your partner isn't an Australian citizen or permanent resident, you're likely to count as a temporary resident for tax. In broad terms, temporary residents are taxed on Australian income and on foreign employment income earned while here, but most other foreign income, such as UK rent and savings interest, is left out. The ATO's detailed page on this didn't load when we checked, so confirm your position with the ATO or an adviser. The status ends when you get permanent residence, and from then on your worldwide income counts.

Working holiday makers

On a 417 working holiday visa, a special rate applies: 15% on the first AUD 45,000 (about £23,240) in 2025–26 [3], with higher rates above that. There's no tax-free threshold for this income.

Australian income tax rates

Taxable income (residents)	2025–26 [2]	In pounds (approx.)
Up to AUD 18,200	Nil	up to about £9,400
AUD 18,201 – 45,000	16% (15% in 2026–27)	about £9,400 – £23,240
AUD 45,001 – 135,000	30%	about £23,240 – £69,720
AUD 135,001 – 190,000	37%	about £69,720 – £98,125
Over AUD 190,000	45%	over about £98,125

The ATO's 2026–27 table keeps the other bands as they are [2]. These rates don't include the Medicare levy of 2%, or the Medicare levy surcharge that higher earners without private hospital cover may pay [2].

An example. A resident in Sydney earning AUD 100,000 (about £51,645) in 2025–26 pays AUD 20,788 in income tax plus AUD 2,000 Medicare levy: AUD 22,788 in all, about £11,770. For comparison, the same £51,645 earned in England in 2026/27 would attract about £8,090 of income tax [6], but National Insurance comes on top in the UK, and Australian employers also pay compulsory superannuation on top of your salary. Comparing the two systems line by line is tricky, so look at take-home pay and benefits together.

You'll need a tax file number (TFN) to work and to avoid tax being taken at the top rate. Most people lodge a return after 30 June each year, through myGov or a registered tax agent.

Leaving the UK tax system properly

The UK taxes by residence, not citizenship, so the goal is to become non-resident cleanly.

Tell HMRC. Use form P85 if you've been on PAYE, or tell HMRC on your Self Assessment return. Our guide to leaving the UK and telling HMRC goes through it.
Check the Statutory Residence Test. Day counts and UK ties decide your status. Too many visits home in your first years can keep you UK-resident. See the Statutory Residence Test explained.
Split-year treatment. In the year you leave, you may be able to split the tax year so that only your UK part is taxed in the UK.
UK income that stays taxable. Rent from a UK property remains taxable in the UK. Register for the Non-Resident Landlord Scheme (form NRL1) so your letting agent or tenant doesn't have to deduct basic-rate tax. As a British national you normally keep the UK Personal Allowance, which is £12,570 in 2026/27 [6].

The UK–Australia double taxation convention

The current convention was signed in 2003 and entered into force on 17 December 2003. It has since been modified by the OECD Multilateral Instrument [4]. The FCDO's Living in Australia guide sums it up: the agreement means you shouldn't pay tax on the same income in both countries [7].

In practice, for most Brits in Sydney:

Income	Who usually taxes it
Salary for work done in Australia	Australia
Rent from a UK property	Both: the UK first, then Australia gives credit for UK tax (temporary residents may be exempt in Australia)
UK State Pension and private or workplace pensions	Generally Australia, where you live
UK government service pensions (such as the civil service and armed forces)	Generally the UK
UK bank interest	Can be taxed in both, with credit given

To stop UK tax being taken from a private or workplace pension, you can apply to HMRC for relief under the treaty with form DT-Individual, certified by the ATO. Treaty wording is precise and has exceptions, so a tax adviser who knows both countries can check your situation. Our guide to double taxation agreements and reliefs explains the mechanics.

Your UK State Pension in Australia

This is the one that stings. Australia isn't on DWP's list of countries where the State Pension goes up each year [5]. The UK and Australia had a social security agreement, but it ended in 2001, and the yearly increase isn't paid here.

Your State Pension is paid in Australia at the rate you got when you first went abroad (or when you first claimed, if you were already here). It then stays at that level [8].
The full new State Pension is £241.30 a week in 2026/27 [9]. Someone who moved out during 2025/26 stays on that year's lower rate, and the gap widens every April.
Coming back to live in the UK lifts it to the current rate [8].
You can still build your UK record with voluntary National Insurance. Whether that's worth it on a frozen pension is a personal sum; see voluntary National Insurance from abroad.

The Australian Age Pension is means-tested and has residence rules of its own, and your UK pension counts as income in that test. Our guide to the frozen UK State Pension in Australia covers how the two interact.

UK workplace pensions, super and the transfer question

Once you work in Australia, your employer pays superannuation into a fund for you. Your UK pensions stay where they are unless you choose to move them.

Moving a UK pension into Australian super is complex. The rules on which funds can receive UK transfers are strict, a transfer can trigger the UK overseas transfer charge, and in Australia the growth on a foreign pension can be taxed if you transfer more than six months after becoming resident. Pension transfers need regulated financial advice. Never act on a cold call or an online "pension release" offer, and read the scam warnings from the FCA and MoneyHelper first. Our guides to UK workplace and private pensions abroad and superannuation and your UK pensions set out the warnings.

If your partner is Australian and you might one day move to the UK together, our sister site ExpatCooee explains whether they stay an Australian tax resident once they move.

Tax questions come up constantly in our community group for Brits in Australia, and members are generous with what's worked for them: join here.

Australian taxes for Brits: residence, the UK treaty and your frozen State Pension