the big nowhere

hi ...i have reasonably substantial pension fund in the uk which kicks in at my elected age of 55.......with the super in aussie can you also elect when to have it 'kick in' or is it a state determined age i.e. 65 or similar.....also can i leave my uk contracted out pension and just draw it when i hit 55....cheers.

MartinLuther

The age that you can collect your super is called your Preservation Age. It's also the day they stick you in a big bottle of formaldehyde.

The Preservation Age depends on your date of birth.

Have a look here http://www.ato.gov.au/super/content....tent/48211.htm

the big nowhere

excellent.....thanks for that.

Pinkie

I actually spoke to a financial planner here yesterday and was told I could leave my private pensions in the UK and have them paid as a lump sum into a UK account when I get to what I assume is my Preservation Age after reading MartinLuther's post (the FP chap said 60) then transfer it here. I don't have to declare any of that here as it's being taxed still over there apparently.

The annoying bit was that he also said if I'd moved my pensions over within 6 months of getting here, I would only have been taxed about 15% on the proceeds but since it's now about 7 months it will be more like 40%. Wish I'd known that beforehand

MartinLuther

I think you may need to speak with another financial planner. Some of that advice sounds a bit dodgy. Although I admit things may have changed since I left the UK so I may be out of date.

In the UK you could cash in 25% of your private pension when you hit a certain age. The rest had to go into an annuity. The tax on pensions seems to fall outside of the double tax agreement (due to something like section 27CAA - I think) so that any tax you pay in the UK is not credited against tax due in Aus. You have to apply to have yourself zero rated for tax in the UK and pay the tax over here.

The 15% and the 40% may be 2 different things. Aus charges 15% on any gain that you make since you arrived (note gain not the whole amount). If you transfer within 6 months you pay nothing. The UK government has made a change that if you cash in your UK pensions to transfer over here then they take 40% unless you transfer into a QROPS rated pension (which you must keep for 5 years - not sure what happens if you hit preservation age within the 5 years). So if you transferred into a QROPS now you would only be hit with the 15% on the gain.

It is worth getting good advice (from a specialist rather than a general financial planner) on this as you can take advantage of the tax free contribution in the UK and the tax free payout in Aus.

Pinkie

He did mention QROPS but what you've said about the double tax worries me. OH is seeing another chap this afternoon so I've told him what you've said - thanks. I hate tax, and pensions, and anything to do with money that doesn't involve simply spending!! Even that is a pain sometimes....