changing cash from £ to $
Jan 8th 2004, 6:14 am
#61
Forum Regular
Joined: Dec 2003
Posts: 94
Re: When do I become a tax resident
Originally posted by shedu
Hello to you all,
Just to add to this confusion -
I am initially coming on a long-stay temp visa (employer sponsored). So within a month of arriving I will be an Australian tax payer and be paying into a superann fund. Does this make me a tax resident? I understand I cannot start organising my UK superann transfer until I have a permanent visa but as a tax resident when does my 6 months start????
I have arranged to go and see a professional asap after I arrive. I think I will want to stay but may not get a permanent visa??
So I will end up paying for someone to do something I probably could do myself but what I do not have is any knowledge of either UK or Aus tax laws and I am prepared to pay for that.
Does all this give anyone else a migraine??
Regards
Hello to you all,
Just to add to this confusion -
I am initially coming on a long-stay temp visa (employer sponsored). So within a month of arriving I will be an Australian tax payer and be paying into a superann fund. Does this make me a tax resident? I understand I cannot start organising my UK superann transfer until I have a permanent visa but as a tax resident when does my 6 months start????
I have arranged to go and see a professional asap after I arrive. I think I will want to stay but may not get a permanent visa??
So I will end up paying for someone to do something I probably could do myself but what I do not have is any knowledge of either UK or Aus tax laws and I am prepared to pay for that.
Does all this give anyone else a migraine??
Regards
1st Question Day 1 - you may already be tax resident - that surprises some - hence why I harp on about pre-departure planning.
2nd Question Incorrect
3rd Question Based on what you have said when you enter, technically 01/07/03 but in practice date of entry - not certain based on fact pattern provided;
4th Issue Your funds perhaps should not go and if it does what exchange rate???? Check structure of fund
5th Issue DIY its like visas, you can do them yourselves - however you are already bringing in experts.
6th Issue You need the interaction of tax, pensions, investments, visas and social security and common sense - that what we do - somebody will say I am advertising - perhaps someone can tell me how you advertise???
Hope that helps??
Jan 8th 2004, 8:10 am
#62
Forum Regular
Thread Starter
Joined: Oct 2003
Location: hayes (not kent)
Posts: 160
Originally posted by gld
Are you talking pensions or plain cash?
Are you talking pensions or plain cash?
proceeds from house goes thru hsbc uk > hsbc oz
cheers
Jan 8th 2004, 10:36 am
#63
BE Enthusiast
Joined: Jul 2003
Location: Westleigh, Sydney
Posts: 554
Maybe I’m being thick, but I can’t see what can be done up front that will expedite the process of transfer from the UK to Oz. The first thing the UK pension fund will want is the details of the Oz Super fund that it is being transferred to, as well as confirmation of your employment from your employer. They will then send all the info to the IR and wait for approval to proceed with the transfer.
If you arrive as a PR without a job, I do not think it would be sensible to start up a Super fund because when you get a job, it may have its own Super fund which you would want to transfer into. This would mean that you would end up doing a Super to Super transfer which would incur costs. The length the process is dependent on firstly the date at which you have a suitable Super fund available in Oz to transfer into and secondly the bottleneck between your pension fund and the IR
One of the good things here is that, if you are like me and had multiple UK pension funds kicking around, it is a good way of consolidating them all into one Oz Super fund. Makes it a lot easier to keep track of.
I agree that when dealing with the ATO (as with the IR), professional organisations get a very different response with items requiring clarification. It is my belief (and this is only based on conversations with ATO staff) that so long as you transfer your pension within 12-18 months of arrival, then you stand no chance of falling foul of the ATO. The reality is that staff available to conduct full investigations of overseas transfers are thin on the ground and they are unlikely to be targeting individuals who miss the 6 month deadline by a few months. It’s a question of priorities. Alarm bells on pension transfers won’t start ringing unless the fund is fairly large ($1m?)
I would say again that if you intend to retire in Oz and you have over 15 years until your retirement there should be little doubt in your mind that you should transfer these to Oz.
Only my opinion, you understand.
If you arrive as a PR without a job, I do not think it would be sensible to start up a Super fund because when you get a job, it may have its own Super fund which you would want to transfer into. This would mean that you would end up doing a Super to Super transfer which would incur costs. The length the process is dependent on firstly the date at which you have a suitable Super fund available in Oz to transfer into and secondly the bottleneck between your pension fund and the IR
One of the good things here is that, if you are like me and had multiple UK pension funds kicking around, it is a good way of consolidating them all into one Oz Super fund. Makes it a lot easier to keep track of.
I agree that when dealing with the ATO (as with the IR), professional organisations get a very different response with items requiring clarification. It is my belief (and this is only based on conversations with ATO staff) that so long as you transfer your pension within 12-18 months of arrival, then you stand no chance of falling foul of the ATO. The reality is that staff available to conduct full investigations of overseas transfers are thin on the ground and they are unlikely to be targeting individuals who miss the 6 month deadline by a few months. It’s a question of priorities. Alarm bells on pension transfers won’t start ringing unless the fund is fairly large ($1m?)
I would say again that if you intend to retire in Oz and you have over 15 years until your retirement there should be little doubt in your mind that you should transfer these to Oz.
Only my opinion, you understand.
Jan 8th 2004, 7:49 pm
#64
Forum Regular
Joined: Dec 2003
Posts: 94
Originally posted by dracupg
Maybe I’m being thick, but I can’t see what can be done up front that will expedite the process of transfer from the UK to Oz. The first thing the UK pension fund will want is the details of the Oz Super fund that it is being transferred to, as well as confirmation of your employment from your employer. They will then send all the info to the IR and wait for approval to proceed with the transfer.
If you arrive as a PR without a job, I do not think it would be sensible to start up a Super fund because when you get a job, it may have its own Super fund which you would want to transfer into. This would mean that you would end up doing a Super to Super transfer which would incur costs. The length the process is dependent on firstly the date at which you have a suitable Super fund available in Oz to transfer into and secondly the bottleneck between your pension fund and the IR
One of the good things here is that, if you are like me and had multiple UK pension funds kicking around, it is a good way of consolidating them all into one Oz Super fund. Makes it a lot easier to keep track of.
I agree that when dealing with the ATO (as with the IR), professional organisations get a very different response with items requiring clarification. It is my belief (and this is only based on conversations with ATO staff) that so long as you transfer your pension within 12-18 months of arrival, then you stand no chance of falling foul of the ATO. The reality is that staff available to conduct full investigations of overseas transfers are thin on the ground and they are unlikely to be targeting individuals who miss the 6 month deadline by a few months. It’s a question of priorities. Alarm bells on pension transfers won’t start ringing unless the fund is fairly large ($1m?)
I would say again that if you intend to retire in Oz and you have over 15 years until your retirement there should be little doubt in your mind that you should transfer these to Oz.
Only my opinion, you understand.
Maybe I’m being thick, but I can’t see what can be done up front that will expedite the process of transfer from the UK to Oz. The first thing the UK pension fund will want is the details of the Oz Super fund that it is being transferred to, as well as confirmation of your employment from your employer. They will then send all the info to the IR and wait for approval to proceed with the transfer.
If you arrive as a PR without a job, I do not think it would be sensible to start up a Super fund because when you get a job, it may have its own Super fund which you would want to transfer into. This would mean that you would end up doing a Super to Super transfer which would incur costs. The length the process is dependent on firstly the date at which you have a suitable Super fund available in Oz to transfer into and secondly the bottleneck between your pension fund and the IR
One of the good things here is that, if you are like me and had multiple UK pension funds kicking around, it is a good way of consolidating them all into one Oz Super fund. Makes it a lot easier to keep track of.
I agree that when dealing with the ATO (as with the IR), professional organisations get a very different response with items requiring clarification. It is my belief (and this is only based on conversations with ATO staff) that so long as you transfer your pension within 12-18 months of arrival, then you stand no chance of falling foul of the ATO. The reality is that staff available to conduct full investigations of overseas transfers are thin on the ground and they are unlikely to be targeting individuals who miss the 6 month deadline by a few months. It’s a question of priorities. Alarm bells on pension transfers won’t start ringing unless the fund is fairly large ($1m?)
I would say again that if you intend to retire in Oz and you have over 15 years until your retirement there should be little doubt in your mind that you should transfer these to Oz.
Only my opinion, you understand.
The delays are not caused by Australia - they are caused by UK. Prsuming that is that the Uk scheme should transfer.
So if you can prepare a UK scheme then you are half way there - and of course you are buying time. Sometimes you can merge UK schemes pre-departure - (only if it is the right advice that is) into a scheme that can transfer quickly. Presuming this is right you can get them into one which allows exchange rate protection and can fast deliver a transfer - 2 or 3 days is possible because that scheme is prepped up - having got details of the Oz scheme some months previous - and with the administrator of UK scheme being on virtually first name terms with the administrator of Oz scheme. Voila! it can be managed and transferred with ease.
If you try moving it into an employer scheme - Australians tend to prefer not to - then if UK scheme is slow what happens if PR changes jobs? Scheme gets stuck in UK.
Merging in UK is possible pre-departure and you can get commercial exchange rates, can be an additional 2 - 4%. If you have moved your fund - check the rate you got and then check the going rate on the day you may see a significant variance, you may be lucky and you may not - then check the variance over the previous few months.
The issue of what you should or should not do requires someone to be aware of all the facts before deciding to transfer - as there is no reverse gear - you cannot move a pension back. If you do return then the UK Inland Revenue will have every reason to question you as to why you moved a pension fund overseas as you stated your intention not to return when transferring - these are the rules. Hence why advice is essential - no doubt a comment which will be seen as advertising - but one which I believe requires consideration pre-departure.
As regards the A$1 Million - we believe following discussions that an audit will take place as to what has happened - just read the Senate Review documents - the ATO \ Treasury were torn to shreds by the Senators - the ATO \ Treasury even asked for "an apology" because of the way they were "treated" - they had no information, no facts. Essentially they were put on notice to sort the problem - how better way to do it but an audit? I would not rely on a comment of a member of staff - get it in writing - its your defence. Because if its Self-Assessment - the message is now declare it.
I am just stating fact so I hope this helps.
Cheers
Jan 8th 2004, 8:21 pm
#65
Banned
Joined: Dec 2003
Posts: 150
Originally posted by gld
Presuming one or more funds should be moved is the basis of how I respond. Hope this comes across the right way as stating fact. The only way that flexibility could be applied is by asking the ATO for flexibility. Flexibility is not in the legislation - i.e. you would have to apply for flexibility. Self-Assessment means you put it in your return, if you don't its evasion. So by elimination there can't be felsibility which was covered in the Senate Enquiry. If someone has had flexibility then some official may have overstepped the mark.
Advance planning means the six months is within grasp of most funds and possible transfers. The art is to get the benefits "front loaded" i.e. packaged in order that the funds can be transferred should it be the best advice. You don't have to transfer but you are ready to transfer - subtle difference. That is why the six months is progressively becoming not a problem for the pre-planned migrants and they also have access to increasing the cost base, i.e. reducing the tax.
PR's and TR's can work in Australia of course, if you wait until you get a job then you are eating into the six months- this is the argument for preparation. Why wait until you get the job? Some PR's and TR's should not transfer their funds others should.
All the paperwork can be set up in advance. Waiting to prepare can result in a guaranteed tax liability. Why unnecessarily eat into the six months - those who do tend to panic and then either transfer or not transfer all because of the tax threat which can be managed.
Migrants can by taking advice pre-departure commence where appropriate merging two or more pension funds into one scheme. That scheme can allow control over the exchange rate consequentially cutting the transfer costs - especially if that UK scheme is able to buy A$ when the rate is right.
Thus by front-loading a transfer application the pension can be released within days- when the agreed fax confirming employment is received and the scheme is geared up.
As to documentation it must be belt and braces - all of which can be dealt with early in the process so there are no hiccups by getting documents to the UK pension scheme even before you leave. This cannot be done by an Australian advisor because if they did they would be advising without a licence.
As regards flexibility - as it is self assessment in Australia then you would have to have a private ruling - you can't just make the rules up and create your own flexibility.
Your comments its best if I comment on phrase by phrase..
"When you transfer a UK pension to an Oz Super fund, it should be direct."
Correct
"Not via any third party fund/investment or intermediary".
Correct
"I would certainly not advocate transferring a UK pension into cash"
You cannot transfer into cash within the UK unless in a few unusual situations.
"or a fund pending AUD/GBP currency fluctuation".
You are exposed to currency anyway take the risk out as much as possible - grab the rate when you can. If the fund should move.
"The instant you do that, you lose the tax free status of the pension fund."
Sorry that's quite on the button if you move UK pension to UK pension there is no loss of status. I have already stated that you cannot turn into cash a UK pension fund. We would never ever move a fund into a cash - because we can't do it, because of the pension regs.
"The transfer has to be direct from the UK pension to the Oz Super fund, otherwise there will be problems with the ATO at this end as well."
Correct
As regards do it yourself - then fine but you still need third parties, i.e. a suitable receiving scheme. Some work on the TINSTAAFL theory others on the explicit charge others on fees.
Not all funds should be transferred, Hence why pension transfers are now a permitted activity as far as UK is concerned there are now but 1800 advisors licensed (last figure advised of) to give pension transfer advice - pensions are not straightforward.
I am not advertising services just stating fact. I accept your opinion of what you feel is right unfortunately we who are regulated have to go into far greater detail and research before we give advice to protect the customer from making the wrong decision.
Hope this helps - no doubt somebody will think its an advert.
Cheers
Presuming one or more funds should be moved is the basis of how I respond. Hope this comes across the right way as stating fact. The only way that flexibility could be applied is by asking the ATO for flexibility. Flexibility is not in the legislation - i.e. you would have to apply for flexibility. Self-Assessment means you put it in your return, if you don't its evasion. So by elimination there can't be felsibility which was covered in the Senate Enquiry. If someone has had flexibility then some official may have overstepped the mark.
Advance planning means the six months is within grasp of most funds and possible transfers. The art is to get the benefits "front loaded" i.e. packaged in order that the funds can be transferred should it be the best advice. You don't have to transfer but you are ready to transfer - subtle difference. That is why the six months is progressively becoming not a problem for the pre-planned migrants and they also have access to increasing the cost base, i.e. reducing the tax.
PR's and TR's can work in Australia of course, if you wait until you get a job then you are eating into the six months- this is the argument for preparation. Why wait until you get the job? Some PR's and TR's should not transfer their funds others should.
All the paperwork can be set up in advance. Waiting to prepare can result in a guaranteed tax liability. Why unnecessarily eat into the six months - those who do tend to panic and then either transfer or not transfer all because of the tax threat which can be managed.
Migrants can by taking advice pre-departure commence where appropriate merging two or more pension funds into one scheme. That scheme can allow control over the exchange rate consequentially cutting the transfer costs - especially if that UK scheme is able to buy A$ when the rate is right.
Thus by front-loading a transfer application the pension can be released within days- when the agreed fax confirming employment is received and the scheme is geared up.
As to documentation it must be belt and braces - all of which can be dealt with early in the process so there are no hiccups by getting documents to the UK pension scheme even before you leave. This cannot be done by an Australian advisor because if they did they would be advising without a licence.
As regards flexibility - as it is self assessment in Australia then you would have to have a private ruling - you can't just make the rules up and create your own flexibility.
Your comments its best if I comment on phrase by phrase..
"When you transfer a UK pension to an Oz Super fund, it should be direct."
Correct
"Not via any third party fund/investment or intermediary".
Correct
"I would certainly not advocate transferring a UK pension into cash"
You cannot transfer into cash within the UK unless in a few unusual situations.
"or a fund pending AUD/GBP currency fluctuation".
You are exposed to currency anyway take the risk out as much as possible - grab the rate when you can. If the fund should move.
"The instant you do that, you lose the tax free status of the pension fund."
Sorry that's quite on the button if you move UK pension to UK pension there is no loss of status. I have already stated that you cannot turn into cash a UK pension fund. We would never ever move a fund into a cash - because we can't do it, because of the pension regs.
"The transfer has to be direct from the UK pension to the Oz Super fund, otherwise there will be problems with the ATO at this end as well."
Correct
As regards do it yourself - then fine but you still need third parties, i.e. a suitable receiving scheme. Some work on the TINSTAAFL theory others on the explicit charge others on fees.
Not all funds should be transferred, Hence why pension transfers are now a permitted activity as far as UK is concerned there are now but 1800 advisors licensed (last figure advised of) to give pension transfer advice - pensions are not straightforward.
I am not advertising services just stating fact. I accept your opinion of what you feel is right unfortunately we who are regulated have to go into far greater detail and research before we give advice to protect the customer from making the wrong decision.
Hope this helps - no doubt somebody will think its an advert.
Cheers
My strategy is:
1. Sell the UK house before leaving UK.
2. On becoming Oz resident to rapidly both get part time jobs (>10 hours per week required)
3. To approach 2 Super funds of choice (probably taking local advice) and contribute to the maximum benefit limit for each of us and then use the balance of the house sale to buy a property in or around Melbourne.
4. Then to arrange transfer of my UK pension funds to my Super fund. I am told that UK pension transfers do not count towards the RBL so all the combined fund should be available tax free or to count as the UPP.
5. After some months to convert both Super funds to allocated pensions for a tax free (or mostly so) income stream.
We are both beyond preservation age but less than 65. Can you see any snags with this approach? The only uncertainty I forsee at the moment is availability of part-time jobs in Melbourne. Can anyone else comment on this?
Thanks
Jan 9th 2004, 3:40 am
#66
Forum Regular
Joined: Dec 2003
Posts: 94
Originally posted by jumbo
My wife and I are planning to migrate to Melbourne later thia year.
My strategy is:
1. Sell the UK house before leaving UK.
2. On becoming Oz resident to rapidly both get part time jobs (>10 hours per week required)
3. To approach 2 Super funds of choice (probably taking local advice) and contribute to the maximum benefit limit for each of us and then use the balance of the house sale to buy a property in or around Melbourne.
4. Then to arrange transfer of my UK pension funds to my Super fund. I am told that UK pension transfers do not count towards the RBL so all the combined fund should be available tax free or to count as the UPP.
5. After some months to convert both Super funds to allocated pensions for a tax free (or mostly so) income stream.
We are both beyond preservation age but less than 65. Can you see any snags with this approach? The only uncertainty I forsee at the moment is availability of part-time jobs in Melbourne. Can anyone else comment on this?
Thanks
My wife and I are planning to migrate to Melbourne later thia year.
My strategy is:
1. Sell the UK house before leaving UK.
2. On becoming Oz resident to rapidly both get part time jobs (>10 hours per week required)
3. To approach 2 Super funds of choice (probably taking local advice) and contribute to the maximum benefit limit for each of us and then use the balance of the house sale to buy a property in or around Melbourne.
4. Then to arrange transfer of my UK pension funds to my Super fund. I am told that UK pension transfers do not count towards the RBL so all the combined fund should be available tax free or to count as the UPP.
5. After some months to convert both Super funds to allocated pensions for a tax free (or mostly so) income stream.
We are both beyond preservation age but less than 65. Can you see any snags with this approach? The only uncertainty I forsee at the moment is availability of part-time jobs in Melbourne. Can anyone else comment on this?
Thanks
Answer depends on visa, previous residency in OZ and children in Oz or not and amount, type of pension, scheme benefits, health plus many other issues - advice in addition should be based upon FIMBRA Guidance Notes. That's the caveat.
1. May not be best to sell house - look at extracting cash - back stop in case it don't work in Oz - is it rentable. You may not want these options. But still consider. If you rent it out - it can work if owned the right way. Worh considering anyway - could be a pre-85 asset as well and has it been rented before in UK???
2. That is OK
3. Fine, but maximum is based on the RBL's not the contribution - care is needed in understanding this;
4. Fine, but this is where you can lose out, if your UK funds are moved at what rate are they being moved? Exercise control over the rate. What rate do you get Commercial or XYZ bank rate - difference could easily be 2 or 3 % points difference.
We have found leakage everywhere, exchange rate, cheques, bank fees, etc., etc. This is why it may be best to get the funds ready pre-departure and get the monies out when you want them by just a phone call - if they should move then that can be within a few days - pre-supposing you have done your pre-departure planning. This also allows re-basing and moving when you are ready which means less tax.
This is a statement of fact which I hope other readers don't take as an advert.
Not all pensions should be moved - which was why we had to cease dealing with some of those who we dealt with in Australia because we could not satisfy ourselves that advice was being given in the best interests of the migrant but in the interests of the advisor. Certainly not all funds should go and those that should go, should go with maximum value - e.g. why move a fund at todays A$2.35 when you can position yourself to buy 25% of your fund if it hits A$2.40 another at A$2.45, etc., etc. Try not to leave the exchange up to the receiving or the exiting scheme that is if the fund should be transferred.
5. Sounds reasonable but before you do this go back to my opening paragraph which could adjust your position.
Excuse the stilted language but we have to be so careful how we put things so they are taken the right way.
Cheers
Jan 9th 2004, 10:23 pm
#67
Banned
Joined: Dec 2003
Posts: 150
Originally posted by gld
Jumbo
Answer depends on visa, previous residency in OZ and children in Oz or not and amount, type of pension, scheme benefits, health plus many other issues - advice in addition should be based upon FIMBRA Guidance Notes. That's the caveat.
1. May not be best to sell house - look at extracting cash - back stop in case it don't work in Oz - is it rentable. You may not want these options. But still consider. If you rent it out - it can work if owned the right way. Worh considering anyway - could be a pre-85 asset as well and has it been rented before in UK???
2. That is OK
3. Fine, but maximum is based on the RBL's not the contribution - care is needed in understanding this;
4. Fine, but this is where you can lose out, if your UK funds are moved at what rate are they being moved? Exercise control over the rate. What rate do you get Commercial or XYZ bank rate - difference could easily be 2 or 3 % points difference.
We have found leakage everywhere, exchange rate, cheques, bank fees, etc., etc. This is why it may be best to get the funds ready pre-departure and get the monies out when you want them by just a phone call - if they should move then that can be within a few days - pre-supposing you have done your pre-departure planning. This also allows re-basing and moving when you are ready which means less tax.
This is a statement of fact which I hope other readers don't take as an advert.
Not all pensions should be moved - which was why we had to cease dealing with some of those who we dealt with in Australia because we could not satisfy ourselves that advice was being given in the best interests of the migrant but in the interests of the advisor. Certainly not all funds should go and those that should go, should go with maximum value - e.g. why move a fund at todays A$2.35 when you can position yourself to buy 25% of your fund if it hits A$2.40 another at A$2.45, etc., etc. Try not to leave the exchange up to the receiving or the exiting scheme that is if the fund should be transferred.
5. Sounds reasonable but before you do this go back to my opening paragraph which could adjust your position.
Excuse the stilted language but we have to be so careful how we put things so they are taken the right way.
Cheers
Jumbo
Answer depends on visa, previous residency in OZ and children in Oz or not and amount, type of pension, scheme benefits, health plus many other issues - advice in addition should be based upon FIMBRA Guidance Notes. That's the caveat.
1. May not be best to sell house - look at extracting cash - back stop in case it don't work in Oz - is it rentable. You may not want these options. But still consider. If you rent it out - it can work if owned the right way. Worh considering anyway - could be a pre-85 asset as well and has it been rented before in UK???
2. That is OK
3. Fine, but maximum is based on the RBL's not the contribution - care is needed in understanding this;
4. Fine, but this is where you can lose out, if your UK funds are moved at what rate are they being moved? Exercise control over the rate. What rate do you get Commercial or XYZ bank rate - difference could easily be 2 or 3 % points difference.
We have found leakage everywhere, exchange rate, cheques, bank fees, etc., etc. This is why it may be best to get the funds ready pre-departure and get the monies out when you want them by just a phone call - if they should move then that can be within a few days - pre-supposing you have done your pre-departure planning. This also allows re-basing and moving when you are ready which means less tax.
This is a statement of fact which I hope other readers don't take as an advert.
Not all pensions should be moved - which was why we had to cease dealing with some of those who we dealt with in Australia because we could not satisfy ourselves that advice was being given in the best interests of the migrant but in the interests of the advisor. Certainly not all funds should go and those that should go, should go with maximum value - e.g. why move a fund at todays A$2.35 when you can position yourself to buy 25% of your fund if it hits A$2.40 another at A$2.45, etc., etc. Try not to leave the exchange up to the receiving or the exiting scheme that is if the fund should be transferred.
5. Sounds reasonable but before you do this go back to my opening paragraph which could adjust your position.
Excuse the stilted language but we have to be so careful how we put things so they are taken the right way.
Cheers
Also I still find it strange that the one financial aspect of being Oz resident which works in Uk immigrants favour is their Superannuation system if, like me, you are beyond preservation age but less than 65.
If you had the money, you could start a Super and top up to a little below the RBL, then transfer a UK pension fund of any size and then either take the lot tax free or an allocated pension also tax free or any combination of these.
Jan 10th 2004, 1:03 am
#68
Banned
Joined: Jan 2004
Posts: 19
Originally posted by jumbo
I presume that you mean in (3) to be sure that the maximum contribution plus growth does not exceed the RBL by the time it is transferred to an allocated pension.
Also I still find it strange that the one financial aspect of being Oz resident which works in Uk immigrants favour is their Superannuation system if, like me, you are beyond preservation age but less than 65.
If you had the money, you could start a Super and top up to a little below the RBL, then transfer a UK pension fund of any size and then either take the lot tax free or an allocated pension also tax free or any combination of these.
I presume that you mean in (3) to be sure that the maximum contribution plus growth does not exceed the RBL by the time it is transferred to an allocated pension.
Also I still find it strange that the one financial aspect of being Oz resident which works in Uk immigrants favour is their Superannuation system if, like me, you are beyond preservation age but less than 65.
If you had the money, you could start a Super and top up to a little below the RBL, then transfer a UK pension fund of any size and then either take the lot tax free or an allocated pension also tax free or any combination of these.
Good luck
Jan 10th 2004, 7:25 pm
#69
Forum Regular
Joined: Dec 2003
Posts: 94
Originally posted by jumbo
I presume that you mean in (3) to be sure that the maximum contribution plus growth does not exceed the RBL by the time it is transferred to an allocated pension.
Also I still find it strange that the one financial aspect of being Oz resident which works in Uk immigrants favour is their Superannuation system if, like me, you are beyond preservation age but less than 65.
If you had the money, you could start a Super and top up to a little below the RBL, then transfer a UK pension fund of any size and then either take the lot tax free or an allocated pension also tax free or any combination of these.
I presume that you mean in (3) to be sure that the maximum contribution plus growth does not exceed the RBL by the time it is transferred to an allocated pension.
Also I still find it strange that the one financial aspect of being Oz resident which works in Uk immigrants favour is their Superannuation system if, like me, you are beyond preservation age but less than 65.
If you had the money, you could start a Super and top up to a little below the RBL, then transfer a UK pension fund of any size and then either take the lot tax free or an allocated pension also tax free or any combination of these.
A reserved almost there - but you have a unique situation, everyones is -
If everything be equal you could be sitting pretty - you have to make it belt and braces though - so that it works without any possible come back on you. For example what if your transfer is audited by UK or Australia and you have a "flawed transfer"? There are so many what if's.
Problems arise for those uncertain of what they want and whether they settle.
You can take it a step further though by working on the hidden costs - which I have discussed on earlier threads. Exchange Rate risk to start with.
The other issue is that. Is the scheme in the first place right to transfer when it may be best to leave as is? There has been a massive pension transfer scandal already in the UK all because of flawed advice - (the pension mis-selling issue is in the public domain). This then leads on to where complications come in. Because if a pension is moved and it should not have been moved and there are a variety of reasons for why one shouldn't or shouldn't yet - you cannot move it back - for one reason preservation and another is the UK exit declaration, etc., etc. If you do it yourself then you are on your own.
I always say take advice before you leave - which of course will be seen as an advert - but you must know all the UK and Aus options and the precise should's and should nots.
Even when a fund should be moved there are pre-UK moves one can make which can improve a transfer.
Cheers
Jan 10th 2004, 7:38 pm
#70
Forum Regular
Joined: Dec 2003
Posts: 94
Originally posted by Nogo
This looks like a good strategy to me but I am not aware of Uk pension schemes who would allow transfers at predetermined rates or chosen times let alone deal in stocks prices in $A.
Good luck
This looks like a good strategy to me but I am not aware of Uk pension schemes who would allow transfers at predetermined rates or chosen times let alone deal in stocks prices in $A.
Good luck
By assembling schemes which should transfer pre-departure not only does the exchange rate get the facility to be protected but you pick up shelter from potential tax - with the scheme being able to be moved the day the pension member gives OK to transfer - electronically.
It can be done for NZ.
The UK advisor must know what he or she is doing when they get involved in such a transfer.
Cheers - Hope it helps
Jan 10th 2004, 9:44 pm
#71
Banned
Joined: Jan 2004
Posts: 47
Originally posted by jumbo
I presume that you mean in (3) to be sure that the maximum contribution plus growth does not exceed the RBL by the time it is transferred to an allocated pension.
Also I still find it strange that the one financial aspect of being Oz resident which works in Uk immigrants favour is their Superannuation system if, like me, you are beyond preservation age but less than 65.
If you had the money, you could start a Super and top up to a little below the RBL, then transfer a UK pension fund of any size and then either take the lot tax free or an allocated pension also tax free or any combination of these.
I presume that you mean in (3) to be sure that the maximum contribution plus growth does not exceed the RBL by the time it is transferred to an allocated pension.
Also I still find it strange that the one financial aspect of being Oz resident which works in Uk immigrants favour is their Superannuation system if, like me, you are beyond preservation age but less than 65.
If you had the money, you could start a Super and top up to a little below the RBL, then transfer a UK pension fund of any size and then either take the lot tax free or an allocated pension also tax free or any combination of these.
A) That a transfer from UK is seen as an undeducted contribution. The Super scheme does not note or distinguish between an undeducted contribution from a UK pension transfer or one made from your own cash. Therefore the RBL applies to all contributions. So by doing as you suggest you will exceed the RBL and suffer excess tax.
B) I read in the same Senate submission that the benefits from a personal pension must be taken as a non-commutable pension for life. - see the quote below. This is something which I will challenge gld on.
I Refer to Mr Stevens response from the Senate Super enquiry:-
Mr Stevens-To my mind, the biggest problem at the UK end is that if you have your money in a personal pension plan, which is essentially the equivalent of what we would call either a master trust or a retail type fund-in other words, not a fund which is operated by the employer-then you can arrange transfer of those benefits in theory, but the Australian fund has to undertake to pay any benefit arising from that transfer and at least 75 per cent of it in the form of a non-commutable, lifetime pension. The first problem we have is that, apart from perhaps a couple of government funds, I do not know of any fund in Australia which will accept money on those terms. Therefore, transfer is not generally possible. It seemed to be a condition that the UK used to require virtually all benefits that came to Australian funds to be paid in pension form. They eventually dropped that, taking an attitude of, 'Well, if that's the way you do it in Australia then so be it,' but for some reason it has been retained for funds other than those operated by employers. - that is personal pensions
Jan 10th 2004, 10:59 pm
#72
Forum Regular
Joined: Dec 2003
Posts: 94
Originally posted by tweed
I am not sure that this is correct. I have just been reading the May 2002 Senate enquiry and I see two flaws with this approach.
A) That a transfer from UK is seen as an undeducted contribution. The Super scheme does not note or distinguish between an undeducted contribution from a UK pension transfer or one made from your own cash. Therefore the RBL applies to all contributions. So by doing as you suggest you will exceed the RBL and suffer excess tax.
B) I read in the same Senate submission that the benefits from a personal pension must be taken as a non-commutable pension for life. - see the quote below. This is something which I will challenge gld on.
I Refer to Mr Stevens response from the Senate Super enquiry:-
I am not sure that this is correct. I have just been reading the May 2002 Senate enquiry and I see two flaws with this approach.
A) That a transfer from UK is seen as an undeducted contribution. The Super scheme does not note or distinguish between an undeducted contribution from a UK pension transfer or one made from your own cash. Therefore the RBL applies to all contributions. So by doing as you suggest you will exceed the RBL and suffer excess tax.
B) I read in the same Senate submission that the benefits from a personal pension must be taken as a non-commutable pension for life. - see the quote below. This is something which I will challenge gld on.
I Refer to Mr Stevens response from the Senate Super enquiry:-
Inland Revenue (UK) says that they will not restrict the lump sum to 25% - but there are other aspects which need considering - which I feel could be challenged by other aspects of law, i.e. a divorce. Picture a situation where a divorcee could have had a share of a pension but loses it on transfer - has she a claim against the ceding scheme - hence the need to be belt and braces. Its not just a tax issue, because pensions are covered by other law, i.e. trust, contract, employment, social security (SERPS), Financial Services, EC Law.
Other aspects of law have caused some providers to be reluctant to honour a no limit position on the commutation
Got to be careful on not being misinterpreted.
Undeducted not part of RBL, excess is.
We are actually still providing input into the aftermath of the enquiry - there are some cracks opening up, i.e. more options,
Cheers
Jan 11th 2004, 12:03 am
#73
Banned
Joined: Jan 2004
Posts: 47
Originally posted by gld
Rules changed a couple of years ago (Ray) Stevens was out of date in his knowledge. The concern that is still there
Inland Revenue (UK) says that they will not restrict the lump sum to 25% - but there are other aspects which need considering - which I feel could be challenged by other aspects of law, i.e. a divorce. Picture a situation where a divorcee could have had a share of a pension but loses it on transfer - has she a claim against the ceding scheme - hence the need to be belt and braces. Its not just a tax issue, because pensions are covered by other law, i.e. trust, contract, employment, social security (SERPS), Financial Services, EC Law.
Other aspects of law have caused some providers to be reluctant to honour a no limit position on the commutation
Got to be careful on not being misinterpreted.
Undeducted not part of RBL, excess is.
We are actually still providing input into the aftermath of the enquiry - there are some cracks opening up, i.e. more options,
Cheers
Rules changed a couple of years ago (Ray) Stevens was out of date in his knowledge. The concern that is still there
Inland Revenue (UK) says that they will not restrict the lump sum to 25% - but there are other aspects which need considering - which I feel could be challenged by other aspects of law, i.e. a divorce. Picture a situation where a divorcee could have had a share of a pension but loses it on transfer - has she a claim against the ceding scheme - hence the need to be belt and braces. Its not just a tax issue, because pensions are covered by other law, i.e. trust, contract, employment, social security (SERPS), Financial Services, EC Law.
Other aspects of law have caused some providers to be reluctant to honour a no limit position on the commutation
Got to be careful on not being misinterpreted.
Undeducted not part of RBL, excess is.
We are actually still providing input into the aftermath of the enquiry - there are some cracks opening up, i.e. more options,
Cheers
I'm not sure what you mean by "to honour a no limit position on the commutation"
Do you know where (on the ATO site or elsewhere) that I can find reference to these current facts?
Jan 11th 2004, 12:28 am
#74
Forum Regular
Joined: Dec 2003
Posts: 94
Originally posted by tweed
Thanks for that.
I'm not sure what you mean by "to honour a no limit position on the commutation"
Do you know where (on the ATO site or elsewhere) that I can find reference to these current facts?
Thanks for that.
I'm not sure what you mean by "to honour a no limit position on the commutation"
Do you know where (on the ATO site or elsewhere) that I can find reference to these current facts?
There is no restriction placed on the amount that can be taken as a lump sum by the UK scheme
Second Question
Its not just in one section - its by putting different factors together - then when you study the interaction of the rules - you then apply to a specific set of circumstances - its not just scheme by scheme - its how you deal with differing sets of circumstances.
One person may have a Retirement Annuity, and a Army Pension and a Protected Rights
Another a Personal Pension with major transfer penalties - and an Opt Out.
You cannot assume anything when it comes to pensions its a very complex subject and when you interact retirement regimes - you interact a minefield - even Inheritance Tax is impacted by pensions. A transfer ex-UK increase exposure to IHT.
Hope that provides clarity and why planning starts in UK
Cheers
Jan 11th 2004, 1:28 am
#75
Banned
Joined: Jan 2004
Posts: 47
Originally posted by gld
First Question
There is no restriction placed on the amount that can be taken as a lump sum by the UK scheme
Second Question
Its not just in one section - its by putting different factors together - then when you study the interaction of the rules - you then apply to a specific set of circumstances - its not just scheme by scheme - its how you deal with differing sets of circumstances.
One person may have a Retirement Annuity, and a Army Pension and a Protected Rights
Another a Personal Pension with major transfer penalties - and an Opt Out.
You cannot assume anything when it comes to pensions its a very complex subject and when you interact retirement regimes - you interact a minefield - even Inheritance Tax is impacted by pensions. A transfer ex-UK increase exposure to IHT.
Hope that provides clarity and why planning starts in UK
Cheers
First Question
There is no restriction placed on the amount that can be taken as a lump sum by the UK scheme
Second Question
Its not just in one section - its by putting different factors together - then when you study the interaction of the rules - you then apply to a specific set of circumstances - its not just scheme by scheme - its how you deal with differing sets of circumstances.
One person may have a Retirement Annuity, and a Army Pension and a Protected Rights
Another a Personal Pension with major transfer penalties - and an Opt Out.
You cannot assume anything when it comes to pensions its a very complex subject and when you interact retirement regimes - you interact a minefield - even Inheritance Tax is impacted by pensions. A transfer ex-UK increase exposure to IHT.
Hope that provides clarity and why planning starts in UK
Cheers
I'm not trying to be provocative but you must see my point!
