andreak

Currently looking into transferring my UK Pension to an Oz Super, got my paperwork from my UK Pension provider, but can I just ask if anyone has done this themselves, and if so how do you find out if the pension has grown since you arrived in Oz (as I've been here over 6 months now) and will have to pay tax on the growth (not that there will be any, I'm sure) but want to check just in case (dont want the tax man after me ).

Thanks for any advice.

Babycoach

yes i'd be interested in info too...seein as Iv been in Oz 24 yrs lol...

cornishexpat

you should recieve annual statements from your provider and also prior to transfering you should ask for a transfer value.you should be able to see from your previous annual statements as to the amount of growth

Andrew Williams

If you are not already aware, ensure you are transferring to a QROPS Superannuation scheme otherwise you will be heavily taxed.

Also if it is a market linked scheme make sure you do not have Market Value Reductions/Adjustments on your fund.

If it is a Final Salary scheme you may have to pay the scheme to provide an historical value, the NHS outright refuse and in the case your scheme is the same it would be wise to utilise the services of an Actuary.


Andy

Babycoach

Wow i can see I am totally in the dark here ! I worked as a nurse for NHS / private Nursing agency prior to leaving to emigrate here so does anyone have any ideas how I trace where my pension is/should be and what i do to trace it all???
This site is amazing if it had been around when I came here would have been so much easier

Babycoach

PS. As I said earlier I have been here 24 years lol

ozhappy981

If it's a Final Salary scheme, then there is no investment growth - and therefore no tax to pay.

With a final salary scheme you get a "transfer value". This figure will change (due to a number of factors). So, if you asked for a transfer value quotation two years ago and for another one now, the two figures will be different. But that has nothing to do with taxable investment growth.

With a UK final salary scheme, your entitlement never changes. It always remains at x/zth of your final salary. "x" is the number of years you have clocked up, "z" is the quotient (60th and 80th are very popular), and "final salary" will have a special definition per your scheme rules.

For example, someone who contributed 7 years in the scheme and is in a 60th scheme will get as a pension 7/60th of their final pensionable salary. Once they leave the scheme, this entitlement will never change, i.e. there is never any "investment growth" to make this entitlement bigger. (If you want to be picky: There are some inflationary increases per regulations - but they have nothing to do with "investment growth".)

There is therefore nothing to tax (until retirement) under Australian legislation for a final salary scheme.

ozhappy981

If your pension is a "money purchase" scheme, you will get annual statements which show the "investment growth" (more likely a loss for the last couple of years).

If you are in a "final salary" scheme, then there is no "investment growth" - and therefore no Aus tax implications now (see post above).

Andrew Williams

Thank you, I understand how final salary schemes work. With all due respect I specialise in UK Pension transfers, I was a Financial Adviser in the UK and a run a private practice here in Australia.

Can you please tell me where you got this information?

andreak

Thanks for all the comments, on this subject, something to think hard about, makes my head spin this does

ozhappy981

I know this because it was my area of expertise (and employment) when I worked in the UK.

If you "understand how final salary schemes work", you must know that they provide benefits based on accrual rate, pensionable service, and pensionable salary (i.e. nothing to do investment growth). And that money purchase schemes provide benefits based on your own 'pot of money', which consists of your own contributions (if any), your employer's contributions and the investment growth you get from the investment of those contributions. [And it's that 'investment growth' the ATO is keen to tax.]

If you need any additional details for your clients, you might want to look at the websites of the "Pension Advisory Service", the "National Association of Pension Funds", and the "Association of Consulting Actuaries" (these three spring readily to mind).

Andrew Williams

I think that you are misunderstanding things here, as you stated your expertise were on Final Salary schemes in the UK, however this is nothing to do with Australian legislation and also the bodies you are quoting do not have anything to do with the taxation of foreign Superannuation fund transfers to Australia.

As said and as you have quoted me” I understand how Final Salary schemes work”. I understand that the benefits a deferred member has accrued are in relation to their final salary when they left the scheme, how many years service they had with the Employer and the schemes accrual rate i.e 1/60th 1/80th.

However this is about the Cash Equivalent Transfer Value (CETV) which is calculated by Actuaries chosen by the Trustees of the Pension scheme to be a fair value to buy those benefits.

Also the CETV is not calculated the same way as the benefits instead a number of factors are used to calculate the CETV. This is backed up by the fact that recent CETV values have increased around 20% since October 2008 due to Government legislation ensuring Trustees of Final Salary schemes give fairer CETV to members transferring their benefits.

Are you a Financial Adviser in Australia?

Does your expertise lie in Pension transfers to Australia?

Please see Section 305-75 of the ITAA 1997. The way the ATO look at this is by the ‘Applicable Fund Earnings’ . Effectively the assessable income is the difference between the CETV at date of residency against the CETV of the fund when transferred to Australia.

Also see this link http://law.ato.gov.au/atolaw/view.ht...D2008113/00001

Although this is in relation to an underfunding issue you will see that the principle is still the same, being that the CETV values and any increase is treated as ‘Applicable Fund Earnings’.

If you can quote legislation to the contrary please do so although I will be surprised as the fact I use the services of an Actuary to provide this information as do many UK Pension Transfer specialist companies.

Regards

Andy

Shellyj

Pension Tracing Service

ozhappy981

I didn't say they had anything to do with the taxation of foreign Superannuation fund transfers to Australia. I quoted these bodies in case you wanted more information on how UK final salary schemes work as opposed to money purchase schemes as you seemed to think that a member of a final salary scheme is entitled to investment growth.

As for the rest of your post: I have frankly better things to do then get into a lenghty legal argument - and looking at your other posts one that will quite likely be futile.

The OP will hopefully seek the services of a properly qualified and experienced advisor if she has a UK final salary scheme.

Andrew Williams

Hi Ozhappy

This was not meant as an argument I was merely pointing out that your quote below

is not quite accurate and that deferred members of Final Salary schemes may be liable to taxation in Australia after a 6 month period if they transfer their Pension.

Having been a Natwest Bank Financial Adviser for a number of years and a fully qualified Financial Planner in Australia for a number of years I am well equipped to provide UK Pension transfer advice.

There are a number of members on this site with Final Salary schemes and I would not like them to think that they would not have tax to pay after 6 months on a transfer.

Not sure why you have got personal on this post as all I have done is provide correct and accurate information as I have on previous posts.

I trust this is the end of this thread.

Over and out.

Kind regards

Andy Williams.