Folks,

Have been in Oz from UK for nearly three months and it's time to decide if I move my two company pensions here. We are still a little unsure about remaining in Oz, probably will but need some more time. I know I need to transfer before the six months is up. I'm not sure what happens after the six months, guess it's a heavy tax bill though. I've heard that I need to combine the two pensions before transferring, can anyone recommend an advisor in the Brisbane area or have any experiences to share?

Also, I have some GBP shares to sell that I have paid tax on in the UK, is it best to sell them in the UK and deposit to my UK account then transfer here? Should I sell using one of the Oz based internet traders - someone must have done this recently - any advice welcome!

Thanks folks.

If the pension fund is transferred more than 6 months after you become a tax resident of Australia there can be a tax liability based on the increase in the value of the fund between the day before you arrive and the day the fund is received in Australia. Fortunately the tax these days is payable by the receiving Aussie super fund and not by the individual taxpayer.

Note that if a pension scheme is left in the UK and you receive a lump sum at retirement that is tax free in the UK you may have a personal liability on that lump sum if you are Aussie tax resident at the time.

I'll leave others to make recommendations as to advisors ...

Best regards.

Also consider do you want to transfer in the first place, if the pensions are final salary based then you ought to consider the pros and cons quite thoroughly. If you transfer the pensions to Australia you can't transfer them back if you later change your mind.



I don't know how an Australian broker could be expected to handle UK shares. You can leave the money in the UK if you wish, just bear in mind that any gains or losses on the shares since you became Australia tax resident are subject to capital gains tax. As far as I know the CGT rate drops after 12 months, it also depends on the rate you're paying income tax this year.


You need to be more clear what you mean when you say you "paid tax on them in the UK".

Jeremy

Alan and Jeremy,

I am in the process of appllying for the visa, but one of the big worries in my mind is whether or not i should transfer my pensions over to Australia. I currently work for the NHS and it is not final salary. Been paying in for about 1 year so the amount would not be too big yet. However I also have another pension which is no longer being paid into with prudential, I used to work for a travel firm for 6 years.

any advice.

regards

Justin

Justin
I transferred 4 pensions over here. 2 with Prudential and 2 with Sun Alliance. Even though I got the ball rolling within a month of ariving, it took over 8 months to finally get them transferred over so I still had some tax liability - but as said above, it came out of the fund.
Prudential was one of the slowest and also the UK tax office gets involved and I had to "prove" that I was no longer resident in the UK or intending to come back.
If you are unsure about your future combined with the the fact that current Aussie law would not allow you to transfer your pension out of the country, maybe you should not do it at the moment.
FYI, I used www.sherwin.com.au who I found excellent.
I am not in this trade at all

Andrew

Two comments:

- Are you comfortable with the tax issues if you leave the funds behind, or if you transfer them to Australia? If not, you should take some professional advice so you can make an informed decision in a tax context.

- You should also look at the after tax cash flow consequences of leaving the funds behind in the UK as compared with transferring them to Australia. The problem with such an exercise is the assumptions that are inherent, including assumptions as to investment returns and exchange rate variations, both of which can have a significant impact over time, and which increase the risk attaching to the retention of retaining your funds outside Australia. There is also the possibility that you might return to the UK to be factored into the equation ...

Best regards.