news just in re transferring uk pensions
#46
Just Joined
Joined: Feb 2006
Posts: 5
Re: news just in re transferring uk pensions
Originally Posted by Neil & Shell
There has been a lot of misinformation about the changes on "A Day". As best I can make it out the following will apply:
1. There is a concept called a "Qualifying Recognised Overseas Pension Scheme" (QROPS) and as far as I know there are none in Australia at this time. There are any number of recognised schemes which essentially means any complying Australian superannuation fund.
2. A transfer made to a QROPS will avoid the deduction of 40% tax by the UK pension fund manager. By definition a transfer made to a fund that is not a QROPS will bear the 40% tax in the UK.
3. A transfer in excess of 25% of the fund value will be subject to a 15% surcharge (tax be another name) and this cannot be avoided. This is paid to the HM Revenue & Customs in the UK.
4. Provided the cheque for the transfer is dated prior to 6 April 2006 then the new rules will not apply.
If you require any further information, the firm of accountants I work for in Brisbane may be able to help - please send me a PM with your email address.
Shell
1. There is a concept called a "Qualifying Recognised Overseas Pension Scheme" (QROPS) and as far as I know there are none in Australia at this time. There are any number of recognised schemes which essentially means any complying Australian superannuation fund.
2. A transfer made to a QROPS will avoid the deduction of 40% tax by the UK pension fund manager. By definition a transfer made to a fund that is not a QROPS will bear the 40% tax in the UK.
3. A transfer in excess of 25% of the fund value will be subject to a 15% surcharge (tax be another name) and this cannot be avoided. This is paid to the HM Revenue & Customs in the UK.
4. Provided the cheque for the transfer is dated prior to 6 April 2006 then the new rules will not apply.
If you require any further information, the firm of accountants I work for in Brisbane may be able to help - please send me a PM with your email address.
Shell
Good reply but think your point three not quite right. The 25% refers to the tax to be paid by the transferee to the UK tax authority on pensions fund savings transferred that exceed your lifetime allowance (1.5 million pounds).
so not many of us affected by that except the lucky few!!
The critical point is that for an Aussie super scheme to become QROPS, the scheme administrator has to register it with the UK tax authorities – and in doing this the administrator has to undertake to provide them with financial information when making future pension payments in respect of transferring members.
Not many if any aus funds want to do this YET! as it means much cost and long term committment from them. No doubt if they can see a business case they will do it. However it leaves all prospective transferees with a huge incentive to
1) get their transfer cheque dated pre 6/5/2006
if not they must
2) try and find a QROPS scheme - uncertain and not easy at this stage
3) transfer post 6/5/2006 and be taxed 40%!!!!!!!
Having just transferred my own company pension plan from UK, I am now considering whether its possible to sort my partners transfer out before 06052006 - its a tough call for anyone starting at this point in time. Ill let you know how I get on.
Chris
#47
Re: news just in re transferring uk pensions
Hi guys,
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
#48
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: news just in re transferring uk pensions
I'm afraid it is impossible to answer that question qualitatively without spending time reviewing your situation thoroughly and preparing a discounted cash flow projection on an after tax basis with a few assumptions also thrown into the mix.
All of which I'm afraid will most probably involve spending some money with a financial planner/accountant ...
Best regards.
All of which I'm afraid will most probably involve spending some money with a financial planner/accountant ...
Best regards.
Originally Posted by lian and jon
Hi guys,
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
#49
Re: news just in re transferring uk pensions
Originally Posted by chrisinperth
3) transfer post 6/5/2006 and be taxed 40%!!!!!!!
#50
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: news just in re transferring uk pensions
The challenge is to find a super fund that post 05/04/2006 has approval from HM Revenue in the UK ...
Best regards.
Best regards.
Originally Posted by NedKelly
That's a bugger. By the time the original pension company has taken it's cut of the funds to come up with a transfer value and then the tax man has had his 40% of what's left. Then after your new Australian pension providor has had his 5% you'll be lucky to end up with 50% of the starting value. On that basis I wonder how many pension consultants could recommend moving the pension?
#51
Banned
Joined: Dec 2003
Posts: 150
Re: news just in re transferring uk pensions
Originally Posted by Alan Collett
The challenge is to find a super fund that post 05/04/2006 has approval from HM Revenue in the UK ...
Best regards.
Best regards.
Regards
#52
Re: news just in re transferring uk pensions
Originally Posted by lian and jon
Hi guys,
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
I am surprised that you would have the choice: I was under the impression that all final salary schemes had a "pot" of money which covered all the employees/pensioners and which could not be segragated.
Bear in mind that some of the pension may be "frozen" as of the date of emigration, too.
#53
Re: news just in re transferring uk pensions
Originally Posted by Wol
I am NOT an expert on pensions!
I am surprised that you would have the choice: I was under the impression that all final salary schemes had a "pot" of money which covered all the employees/pensioners and which could not be segragated.
Bear in mind that some of the pension may be "frozen" as of the date of emigration, too.
I am surprised that you would have the choice: I was under the impression that all final salary schemes had a "pot" of money which covered all the employees/pensioners and which could not be segragated.
Bear in mind that some of the pension may be "frozen" as of the date of emigration, too.
I'm just trying to get mine done now before that April deadline.
My old companies scheme like so many others has been closed. Yes you are "guaranteed" your pot but the scheme is under funded and who knows what the government legislation will do to it in the future.
I prefer to have my pot here where I can influence it and I believe obtain higher growth. The Aus system is so much more flexible and you have a direct imput into it's affairs.
#54
Re: news just in re transferring uk pensions
Originally Posted by lian and jon
Hi guys,
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
The implications of the forthcoming changes look onerous and complicated. It may, all being well, be that we will be moving to Oz on a 136 in May, obviously too late to be doing anything before the change.
However, I am in a Final Salary scheme and have earnt 30/60ths at the time I will be leaving and freezing it. The question to those of you in the know is, should I consider transferring the ''holy grail'' of pensions or just keep it until retirement and transfer the monthly pension to OZ? Obviously any monthly payment will be at risk of adverse exchange rates but I assume, nevertheless, that this would offset by a better and guaranteed monthly (UK) income, and exchange rates could be the other way and benefit.
Any comments or advice?
Regards,
Jon
My position on this is (ignoring tax for the moment) that I would rather face the exchange rate risk of leaving it in the UK than the stock market risk of transferring from a defined benefit scheme to one that relies on the stock market over here. Once I feel totally settled over here with no chance of going back I may transfer.
#55
Re: news just in re transferring uk pensions
Originally Posted by jumbo
If all this is true HM Revenue will have to disclose which companies it has approved.
Regards
Regards
#56
BE Enthusiast
Joined: Oct 2005
Location: Blighty
Posts: 950
Re: news just in re transferring uk pensions
[QUOTE=ozzieeagle]I've only found out recently via this forum that if I pay approx 8months insurance stamps that I can claim a portion of the british pension (8 months giving me 10 years in the UK workforce). QUOTE]
Isn't the qualifying length in time in UK workforce 11 years? (or is that for women?)
TC
Isn't the qualifying length in time in UK workforce 11 years? (or is that for women?)
TC
#57
Re: news just in re transferring uk pensions
>>Yes, it is possible to transfer final salary schemes. Maybe there are different ones but certainly I can transfer mine.<<
I *said* I wasn't an expert!
I don't *think* I could have transferred my own - too late now, anyway.
I only found out about the freezing of some of private pensions after it was too late to transfer.
I *said* I wasn't an expert!
I don't *think* I could have transferred my own - too late now, anyway.
I only found out about the freezing of some of private pensions after it was too late to transfer.
#58
Banned
Joined: Jan 2004
Posts: 19
Re: news just in re transferring uk pensions
Originally Posted by Alan Collett
The challenge is to find a super fund that post 05/04/2006 has approval from HM Revenue in the UK ...
Best regards.
Best regards.
Best Regards
#59
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: news just in re transferring uk pensions
That seems to be the emerging consensus view ...
Best regards.
Best regards.
Originally Posted by Nogo
Is all this genuine? I find it hard to believe that HM Rev have any business in approving non-UK pension schemes. But you would know as being involved in pension transfers?
Best Regards
Best Regards
#60
Re: news just in re transferring uk pensions
Originally Posted by Nogo
Is all this genuine? I find it hard to believe that HM Rev have any business in approving non-UK pension schemes. But you would know as being involved in pension transfers?
Best Regards
Best Regards