Amaru

Hi,

I'm on a 457 Employer Sponsored 4 year visa and am to apply for permanent residency in the near future (ENS). I've been told by my previous pension provider in the UK that as there's a potential I may return to the UK, i.e. if my permanent visa application is rejected, they are unable to transfer my pension to my Australian provider.

I've been told you only have 6 months to transfer your pension after arrival in Australia to avoid tax. Does this mean I will be taxed when I am finally allowed to transfer?

Thanks

Go Banana's !!

Funnily enough I had a meeting with a guy about pensions yesterday. He handles alot of my families affairs over here so I trust him implicitly.

There is a 6 month time window but he says you can argue about the date you actually came into the country if you say did a validation trip and then came back several months later - like me. You do pay tax if you leave it after the 6 months but I couldn't tell you how much etc.

My advice is to Get some advice as every case could be different.

Good luck

Warren

adavis

We used this lot to transfer our UK pensions to an Oz super fund.

www.godfreypembroke.com.au

Andy

Bix

I suspect that what they are telling you is utter crap and if you wish to transfer now you can.
Speak to your Aus provider as if I am correct they can probably sort it for you.

I am in a similar position to you except mine is a 2 year temp 457 and I am about to apply for RSMS.

My advisor told me it is possible to transfer immediately hence within the 6 month tax free timeframe. If I didn't get PR and went back to UK I could still have my pension paid from Aus anyway.

I have decided to wait until I get the PR before transferring. If that is outside the 6 month timeframe I will be liable for tax but only on the amount that the pension has grown since I became tax resident - not the full pension value. So effectively the growth over a few months which will not be huge.

My advisor is contacting my pension fund in the UK now to set all the paperwork up so the transfer can be immediate if I get PR.

sharon_gareth

They say its a six month window but we were told you could argue the time. From what I understand you are taked on the growth in your pension so if you transfer it within a reasonable time the tax you are likely to pay will be minimal as the fund would not have had time to grow by much.

The people who are in for a shock are more likely to be those who leave pensions in the UK for years before doing anything.

Just bits I have picked up you are better talking to an expert on the subject to be sure.

Sharon
www.immigrate-to-a-new-life-in-perth.com

kirsty&al

I though it was 6 months from becoming PR and arriving to stay permanently. As someone else said, you only get taxed on the increase in the fund and not the whole fund. Also the cost of transferring the pension is also taken into account and this will more than likely offset any gains that have been made.


Regards
Alistair

Alan Collett

The tax provisions in question allow you 6 months from becoming a tax resident of Australia to effect a pension transfer, after which you have a tax exposure ... your visa status isn't the issue here ...

Best regards.

jjonboy

[QUOTE=Alan Collett]The tax provisions in question allow you 6 months from becoming a tax resident of Australia to effect a pension transfer, after which you have a tax exposure ... your visa status isn't the issue here ...

Best regards.[/QUOTE

OK i'm confused..... So if you have a pension left behind in the UK (10 years worth or so) then you are nearly always better to get it transferred to Oz?

JAJ

I'll pre-empt Alan and say 'it depends'

There are a number of important issues to consider including the type of pension (employer sponsored, private etc) and your own plans for the future. For example it doesn't make much sense to transfer the pension and then move back to the UK.

You've got to explore the issue in detail with a competent professional.

Jeremy

Amaru

What would be the tax exposure? On the growth between becoming tax resident and the transfer date or on the lump sum transfer?

jensteve

Have been to pension fella this week, he said there was little beneift now transfering pensions as the UK had made an agreement with OZ that even if it stays in the UK the tax payable will be the same as over here 15%! He also said that it used to be paid upfront with your tax return, they have stopped this and it is paid when the policy matures, he was a nice guy who said that really the only beneift would be that it would be here and easier to maintain and can be linked to your job here.
He did say that he has to supply the same deal as the UK or he cannot bring it over, he said that the UK had decided due to the amount of people leaving that they would have to do something as up till now loads had transferred their funds out of the country, and this was the idea they came up with.
I have decided that my 2 smaller pensions may as well stay in the UK as there would be a charge to transfer them over it makes little sense as the tax is the same.
My other halfs though will be coming over and linked to his job over here and I have another appointment with the bank when they get the paperwork through from the UK to make sure he gets the same policy here.
It will be interesting to see what happens, but the tax thing he said has altered, it used to be 49% on what your policy had made in the year and you would have to pay that on your yearly tax return, this he said has been scapped.

Jenny

Alan Collett

1. Did he discuss the Foreign Investment Fund Rules and whether they apply to you? The liability to FIF tax remains in place (subject to exemptions - for example in respect of employer sponsored superannuation), in spite of the changes earlier this year to which you refer (which affect what is called section 27CAA, not the FIF provisions).

2. Did he discuss the difference between how pension income from a UK fund is assessed on an Aussie tax resident compared with income deriving from a UK pension fund that has been transferred into an Australian superannuation fund?

3. Did he discuss the amount of capital that can be accessed from a UK pension fund at retirement age compared with that is available from an Australian super fund?

4. Did he discuss the situation on the death of the recipient of the pension and in particular the transfer of capital to a surviving spouse?

Your summary of his comments would indicate that it might be worth discussing matters with another advisor ...

Best regards.

stressfree

Just been reading this thread. Recently taken Professional advice regarding moving various pensions from UK to OZ. Know zilch about this area.
The guy who advised me seemed very knowledgeable but he did say if I did not move my pensions pretty quickly it would cost me very large amounts of money. The only way to avoid this is to spend a lot of money with his firm. This seems to be the classic hard sell dilema. I must spend a large sum of money now, on his services, or lose an even larger sum in the future if I do not use his services.
I'm feeling pressured and I always make bad decisions if I'm pressured so I may very well do nothing cos in the past this was nearly always the best thing to do.
Things may change and often do. For instance John Howard may do what Thatcher did in the UK 20 years ago and free up the australian financial system. Perhaps he will scrap the tax on foriegn income. Who knows cos I'm sure I dont.
stressfree( wish I was)

Alan Collett

If you are still in the UK and haven't moved to Australia you can't move your pension fund to Australia ... did he mention that to you?

In short, don't be pressured into spending money. There can be a need to make a decision on transferring a pension fund fairly quickly to avoid a tax liability, but perhaps not in the manner it has been portrayed to you ...

If you want a name and number of another person with whom you can chat through this subject let me know by sending me an email.

Best regards.

Nogo

[QUOTE=jensteve]Have been to pension fella this week, he said there was little beneift now transfering pensions as the UK had made an agreement with OZ that even if it stays in the UK the tax payable will be the same as over here 15%!

This statement about 15% tax looks highly suspect!