RobAndEwa

Thanks for all the replies. Sounds like something I will leave till I've arrived in Oz and then organise it through my super.

And yes, I'm aware of the potential drawbacks like it being a one-way trip - but thanks to everyone who reminded me of them, they're important to realise.

If anyone is interested, I believe the (very simplified) story with pensions is:

• You pay into pension funds tax-free in the UK, but get taxed on the income when you retire.
• You pay tax on money going into a Superannuation fund in Australia, but the income is tax-free and has fewer strings attached.
• You can transfer your UK pension to an Australian Super fund provided it is a QROPS. This means you'll have effectively paid in tax free and then get to take the money out tax free.
• The rules are different if you retire within 5 years moving the pension
• The move is currently one-way only. If you change your mind and come back to the UK you'll retire with an Australian, not a UK pension - so remember the exchange rate costs.
• You can move your 2nd state pension too if you contracted it out (used to be called Serps)
• If you don't move your pension, when you retire it'll be counted as an overseas income, not a pension, and therefore be taxed income in Australia.
• You always have exchange rate risk - either now when you move it, or when you retire and collect the income in Australia.
• If you have a final salary scheme, I'd strongly recommend getting some impartial advise - you need to weigh up the guaranteed UK income vs the fact that you'll have exchange rate fluctuations and be taxed on it.
• It is often a good idea to move it to a different Superannuation fund than your Australian employer's fund as you may need to demonstrate you've followed the UK pension & tax rules at a later date.

There are many complications, this isn't advise, I don't take any responsibility if you loose money based on these comments, this is just my personal opinion, speak to a financial advisor, things change, etc, etc.

Hope this helps. If anyone has any corrections, please let me know.

Rob

Techno Freak

I called the Australian Tax Office as I also thought you could offset the loss, but they told me absolutley not.
Can I ask where you got your info from?

Cheers.

carlap

This could be one of those urban myths that I picked up on this forum.
There are a lot of threads on UK pensions and my understanding is that you will pay tax on the gain of a UK pension each year from the date you came over. Likewise, I assumed a loss can be offset.

After a quick search, I found a thread saying you will be taxed on a gain, but cannot offset a loss. We have one final salary and one personal pension. We will not transfer the final, but will transfer the personal. I was hoping (or naiive) to think I could 'gain' a little from the obvious loss on the personal pension that will happen this year.

I hope I have not mislead or misinformed you or anyone else.

I am no expert, so I guess its the usual thing - be aware most of the people on here are expressing opinions, you should get professional advice to be sure.

Techno Freak

Well, I contacted a transfer company for their take on it and got this reply....

--------------------------
Thank you for your e-mail.

I am afraid that a loss in respect of your UK pension fund cannot be claimed on your tax return.

The legislation states that the ‘growth’ figure cannot be less than zero – i.e. it cannot be a loss.
--------------------------

That correlates with what the ATO told me. Shame, it would have been a nice little earner with the amount the funds have lost of late.

That's the game to be in - transfer companies. Money for nothing! I just got the forms from my super fund to transfer, myself and it seems a piece of cake really.

Robbie_Paula

Am I right in thinking:

1) if you don't move it over within 6 months you are liable 15% tax for any growth between the fund at the date of your move to Oz and the end of the tax year?

2) you have to move your pension within 6 months to avoid paying tax in retirement??

I think I'm correct with 1) but not toooo sure about 2) - any help would be appreciated, and I understand these are just opinions, not professional advice.

Paula

datamile

1 yes, 2 no idea. 15% of bugger all I predict for the next 4 years if you moved between 2 years and 2 months ago

RobAndEwa

I believe 2) is essentially correct. Your Pension income in Oz is tax-free, and you can transfer your pensions with no Capital Gains tax if you do it within 6 months of arriving.

Note that your UK pension is not counted as a Pension in Oz, but rather a foreign income and so taxed at your marginal rate - hence the attraction of transfering it.

Rob