news just in re transferring uk pensions
#31
Migration Agent
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Re: news just in re transferring uk pensions
This posting probably pertains to the new pensions legislation in the UK that comes into effect on 06/04/2006 ("A Day", as it is being called) - which affects UK tax, not Australian tax.
As with all new legislation (particularly in an area as complicated as pensions) I think there's a lot that remains to be taken on board and understood, with a significant amount of clarification needed before it can be put across to the people most affected in plain English - I'm afraid the people who draft the legislation in the UK make it devilishly complicated to understand.
Personally, I doubt there will be a UK tax charge if there is a transfer to a qualifying overseas pension scheme - but that's only a hunch, not an opinion based on any detailed review of the new provisions.
Best regards.
As with all new legislation (particularly in an area as complicated as pensions) I think there's a lot that remains to be taken on board and understood, with a significant amount of clarification needed before it can be put across to the people most affected in plain English - I'm afraid the people who draft the legislation in the UK make it devilishly complicated to understand.
Personally, I doubt there will be a UK tax charge if there is a transfer to a qualifying overseas pension scheme - but that's only a hunch, not an opinion based on any detailed review of the new provisions.
Best regards.
Originally Posted by vb2
my agent sent me this snippet of info recently - thought i would share with all those who are planning to transfer their UK pension to oz!
" You need to be aware about a new rule affecting UK pensions transferred to a Aussie pension provider. From April 1st this year the Aus government will tax the 'transfer value' of any occupational or private scheme 'fund' transferred into Aus at a rate of 40% !!! So leave any pensions you have where they are, here in the UK!!
hope it makes sense and helps you folk!
regards
vb2
" You need to be aware about a new rule affecting UK pensions transferred to a Aussie pension provider. From April 1st this year the Aus government will tax the 'transfer value' of any occupational or private scheme 'fund' transferred into Aus at a rate of 40% !!! So leave any pensions you have where they are, here in the UK!!
hope it makes sense and helps you folk!
regards
vb2
#32
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Re: news just in re transferring uk pensions
PS. Here's a link to the draft HM Revenue Guidance Material for starters:
http://www.hmrc.gov.uk/manuals/rpsmm...sm14101020.htm
http://www.hmrc.gov.uk/manuals/rpsmm...sm14101020.htm
Last edited by Alan Collett; Jan 29th 2006 at 1:34 am.
#33
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Re: news just in re transferring uk pensions
PPS. It therefore seems one will have to ensure the Australian super fund into which the UK fund is being transferred is "recognised" by HM Revenue. Or more accurately, the trustees of the UK pension scheme which is making the payment to the Australian super fund will need to be satisfied in this regard ...
#34
Re: news just in re transferring uk pensions
Originally Posted by Alan Collett
PPS. It therefore seems one will have to ensure the Australian super fund into which the UK fund is being transferred is "recognised" by HM Revenue. Or more accurately, the trustees of the UK pension scheme which is making the payment to the Australian super fund will need to be satisfied in this regard ...
#35
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Re: news just in re transferring uk pensions
Agreed that a transfer before 06/04/2006 means you are working within a regime that is understood by more people ... and of course if you do so you can move your UK fund to (perhaps) a wider choice of funds.
In a wider context, isn't it ironic that these new rules are being introduced under the pretext of a simplification of the pension regime? It reminds me of the introduction of the financial services legislation a few years ago, which was brought in to protect the public and resulted in legislation that took years to understand, mostly because it seems the law was written by people who had no practical experience of working at the coalface of industry.
Hey ho ...
Best regards.
In a wider context, isn't it ironic that these new rules are being introduced under the pretext of a simplification of the pension regime? It reminds me of the introduction of the financial services legislation a few years ago, which was brought in to protect the public and resulted in legislation that took years to understand, mostly because it seems the law was written by people who had no practical experience of working at the coalface of industry.
Hey ho ...
Best regards.
#36
Re: news just in re transferring uk pensions
Originally Posted by Alan Collett
Agreed that a transfer before 06/04/2006 means you are working within a regime that is understood by more people ... and of course if you do so you can move your UK fund to (perhaps) a wider choice of funds.
In a wider context, isn't it ironic that these new rules are being introduced under the pretext of a simplification of the pension regime? It reminds me of the introduction of the financial services legislation a few years ago, which was brought in to protect the public and resulted in legislation that took years to understand, mostly because it seems the law was written by people who had no practical experience of working at the coalface of industry.
Hey ho ...
Best regards.
In a wider context, isn't it ironic that these new rules are being introduced under the pretext of a simplification of the pension regime? It reminds me of the introduction of the financial services legislation a few years ago, which was brought in to protect the public and resulted in legislation that took years to understand, mostly because it seems the law was written by people who had no practical experience of working at the coalface of industry.
Hey ho ...
Best regards.
#37
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Re: news just in re transferring uk pensions
Sounds like you are as much of a cynic about the underlying motives of the UK Government as me ... :-)
Best wishes.
Best wishes.
#38
Re: news just in re transferring uk pensions
Originally Posted by Alan Collett
Sounds like you are as much of a cynic about the underlying motives of the UK Government as me ... :-)
Best wishes.
Best wishes.
#39
bradford 2 brissy at last
Thread Starter
Joined: Nov 2004
Posts: 575
Re: news just in re transferring uk pensions
cheers, will have a nosey later, as i could do with doing some research too, my hubby has a frozen pension that will need transferring at some point
regards
vb2
regards
vb2
#40
Banned
Joined: Dec 2003
Posts: 150
Re: news just in re transferring uk pensions
Originally Posted by Alan Collett
PPS. It therefore seems one will have to ensure the Australian super fund into which the UK fund is being transferred is "recognised" by HM Revenue. Or more accurately, the trustees of the UK pension scheme which is making the payment to the Australian super fund will need to be satisfied in this regard ...
#41
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Re: news just in re transferring uk pensions
Possibly ... it may be that one transfers to a "holding fund" that is recognised by the UK Revenue and then onto a DIY Fund ...
Best regards.
Best regards.
Originally Posted by jumbo
Presumably this might be a problem for diy super funds?
#42
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Joined: Jun 2005
Location: North Lakes (Originally Newcastle, UK)
Posts: 118
Re: news just in re transferring uk pensions
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
#43
Re: news just in re transferring uk pensions
Originally Posted by NedKelly
IMHO they are trying to tighten up the flow of pension money overseas. The reason is because the UK is stuffed with pension liablilites it can't fund and levys on individual pension funds may be the only way it can help alleviate the burden. This process has already been started with the compensation scheme.
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). Reading this particular thread, it looks like it could be prudent to try and qualify sooner rather than later.
Anyone know where I make the first initial inquiry and what I need as a reference for them.
#44
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
#45
Re: news just in re transferring uk pensions
Originally Posted by NedKelly
Do you have a link where this is explained, prefereably in words of one syllable for us laymen. Thanks
http://www.hmrc.gov.uk/pensionscheme...-transfers.pdf
This is all put out by HMRC under the guise of "Pensions Simplification'.