Pension advice needed
 

To any financial wizards out there.

I'm moving to permanently to South Australia next July, to be with my children, I will have PR. I will be in receipt of a police pension and will be looking for employment to supplement the pension. What is the best way to have my monthly pension payments transferred to an Australian bank account?

Regards Steve

Re: Pension advice needed
 

As one ex to another...:) You can arrange for your pension department to send straight to Australia but there will be an admin fee and you get stuck with the exchange rate at the time - also, probably, not a very good one.

You can quite legally retain your bank account in the UK. Get your pension paid into that (I just changed from salary into my UK account to pension.)

You can then move your pension as and when you want by using an internet Forex company. I use tranzfers at www.tranzfers.com and have been for 5 years without a hitch.

There is a fixed fee of £7.00 per transfer regardless of the amount.

If you want to shift your lump sum over, then the UK bank may have a max limit of say £20,000. If you move more than £10,000 at once, the ATO may want you to explain it but that's all it is, an explanation.

This way you can choose the time that you transfer, also the amount. With the pound very weak against the dollar, I leave quite a lot of pension in the UK and purchase things on the net from the UK. This also avoids an overseas transaction charge by the bank on your debit card.

If your present UK bank won't let you keep your current account, LloydsTSB will. I get annual statements, tax advice and replacement cards sent to my address in Oz.

All very painless. :)

If you aren't aware, since July 2006, there is a double jeopardy arrangement on UK pensions in Oz. You will pay tax in Oz but NOT in the UK. You will have to fill in the forms in the UK and you will also need to get the ATO to send you a certificate of permanent residence and tax residence to forward to the Inland Revenue, or whatever they are called now.

Re: Pension advice needed
 

Thanks for that.

Steve

Re: Pension advice needed
 

Depending on how Australia taxes lump sums, it might be better to delay becoming tax resident until the lump sum is received. Get some professional assistance.

Concerning the pension stream, look to see if you can claim a deduction for the "Undeducted purchase price" - depending on circumstances, it can mean you can apply to have part of the pension paid (the part that represents return of your own capital contributions) tax free. You might need professional assistance with this.
http://www.ato.gov.au/businesses/con...tent/86196.htm

Re: Pension advice needed
 

If you have already taken your pension and lump sum, or are about to do so and just want to transfer the amount you get over every month

...you need to complete Form Australia - Individual 2003 available from HMRC website and send it to the australian tax office once you arrive and have a tax file number. The ATO will then certify this and return it to HMRC who will in turn change your tax code so you won't pay any uk tax. (this takes a few months - Dec to May for us). Then you need to declare the pension in your aussie tax return. The lump sum you have already had is tax free as you received it before you became an aussie resident. We have an HSBC account so can just transfer the money between our uk and oz account when needed. Others use ozforex or other transfer company.

If you are considering transferring you pension over and investing it here, you need personal advice from a public sector pensions expert which you will need to pay for. There are pros and cons, involving different tax treatments between the two countries.

Do not move to Oz and then take your lump sum as it will most likely be subject to OZ taxation :eek::eek:

Hope the move goes well

Re: Pension advice needed
 

If you use ozforex
( the sister company to tranzfers) and move 3k uk pounds there is no fee payable for the transfer ;)

Re: Pension advice needed
 

have started a new thread on this issue - didn't want to hijack this one but have wondered about whether this was worth applying for and if anyone has been successful?

Re: Pension advice needed
 

Thanks guys for some invaluable advice.

Steve

Re: Pension advice needed
 

It is certainly worth considering transferring the whole fund to Australia as a Pension fund transfer as there can be some great advantages to having your retirement pot here!

However as mentioned you will need to take professional advice in this area as it is not always in a persons best interests and there are also a lot of complexities involved.

Regards

Andy

Re: Pension advice needed
 

What are these advantages to someone whose pension is about to go into payment? I thought that usually in that situation it was better not to transfer.

Re: Pension advice needed
 

There are many advantages over the UK system.

Potentially the biggest is that over the age of 60 income streams from Super/Pension accounts are tax free.

Of course that may not benefit some on the basis that the income they receive from a UK pension is not going to be taxed due to it being below certain income levels but once in receipt of either UK state and or Australian age pension then they could exceed these limits.

Regardless of someone's situation they investigate a transfer of pension benefits. I have seen situations where UK pension companies will not allow transfers if within a certain timeframe of retirement but this is not always the case.

Regards

Andy

Re: Pension advice needed
 

The police pension is not a fund. Indeed, it is like no other pension. I don't think it will qualify for transfer. Far better to take it.