Green Grass

Hi all. I arrived in Australia 3 years ago and left 4 pensions funds in the UK, one personal pension (DC scheme) and 3 final salary.

Does anyone know the tax implications of transferring now?

Before I left the UK, I thought (having missed initial 6 month exemption period) that I would be taxed only on any exchange rate benefit on my funds left behind. Now I am not so sure. Am I taxed on the growth on all my funds since leaving (including Cash Equivalent Transfer Value) or just on my non-employer sponsored fund?

I appreciate this is a complicated area but if someone has specific experience having transferred recently, I would be grateful for any guidance.

Thanks
GG

DeclanSyd

Tax is payable on growth since the date of Australian residency (unless transferred within 6 months of becoming a resident). Growth includes both currency growth and growth in the transfer value itself.

This growth can be taxed at your marginal rate or within your superannuation account. Most would nominate their superannuation account given the tax rate is often far less.

Some final salary schemes will still have transfer values that change over time. I've seen some final salary schemes that have had significant growth to their transfer values over the last few years. Whilst this means more tax is payable, it's a good problem to have!

It can often be difficult to obtain historical transfer values from UK pension funds, which can create issues.

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spuddyo

I did mine recently and was taxed on the growth value of the fund since arriving in Australia. SO for example if your fund was 100k at the time you moved out here in 1999 and you transfer now with a fund value of 299k you pay 15% tax on the 100K growth.

The upside is when you die, the money in the Aussie fund is yours and goes to your family. In the UK , depending upon what type of fund you have, most of the balance may be written off by the Insurance Companies and your family end up with 3/5ths of nowt.

That's the one reason that convinced me to transfer. Better to pay some tax than lose the lot.

DeclanSyd

Transferring funds into an Australian Superannuation account will also provide access to a tax free pension (when age/employment conditions are met). Whereas if funds are left in the UK, the income can often be taxable in Australia.

GG - I work in this space and help a lot of UK expats with both National Insurance and transferring their pensions - Please let me know if you have any further questions.

old.sparkles

Please read the site rules though Declan

DeclanSyd

Sorry if that was misinterpreted. My intention was that the questions were posted on the forum and I could provide further information... I trust that isn't a breach of the rules?