65 million

Hi all,

Haven't been on this site for ages. We left the UK back in December 2004 and until now Ive left my pension over there. I'd now like to consider transfering it into my Australian Super fund. In true Australian style I realise there are tax implications in doing this (grrrrrrr). I found an info leaflet from AusSuper regarding transfer and it seems to imply a tax rate of 15%. Now would this be either:

1. 15% blanket tax on the wholef funds current value or
2. 15% of the Growth since we left the UK in December 2004 to present?

I rang up Aus Super and they didn't know. Anyone who can shed some light and advice on this I'd be most grateful. I'm not pensionable age yet, a while to go.Many thanks, Neil.

65 million

Can anyone help me please????

Hebe

Not sure what the process is or anything but mine is in the middle of being transferred as we speak - My financial adviser is sorting this out - he is based near you if you want his number?

Andrew Williams

Hi

Tax is based on what is classed as Applicable Fund Earnings (AFE), AFE is calculated by the growth of the fund generally from becoming resident in Australia until the monies arrive in Australia.

If there is AFE this is added to a persons income for the tax year and taxed at their Marginal Tax Rate (MTR).

If the whole fund was transferred and closed in the UK then generally it is possible to have the tax deducted at a concessional rate of 15% from within the fund.

This link may help http://www.moneymanagement.com.au/pr...ated-australia

One thing about the article I do not like is that it implies consolidation is worth while (after exploring tax issues) in most cases.

I disagree with this and believe that people should investigate what they are gaining and what they are losing, it may be better to keep it in the UK.


Regards

Andy

Kiwipaul

Do a search on QROPS as any UK pension transferred anywhere needs to comply with QROPS rules and these rules apply for 10 years after the transfer has occurred.
I doubt you could consolidate your UK pension into a Oz pension (without keeping it as a separate account because of the QROPS rules). You will find very few Super agents familiar with this process as it is just too specialized.
It's the increase in value of the pension (since arrival) that is liable for tax and I believe you can minimize this to 15% by claiming it as a before tax contribution, so long as you stay within your annual contribution limits.

I looked into this and put in the too difficult basket and so will be leaving my pension in the uk, and wearing the tax when I receive it in Oz.

Fardell

In very general terms you are liable for Australian tax on the growth in the funds since you became resident - but this is measured in AUD terms so will be affected by the (large) change in exchange since. You then have a choice/option in terms of how any growth is taxed - it can either be taxed as if it had actually been within an Australian pension fund in the meantime (at 15%) or at your marginal rate.

The difficulty in these type of transfers is not normally around taxation but, if it is a final salary/defined scheme, determing the value at X date. In some cases Actuarial calculations are needed. Remember, if you are in the happy position of having a transfer value which exceeds AUD450K (disregarding any growth) things get quite a bit more complicated and professional advice is absolutely necessary.

65 million

Thanks all for your feedbak, much appreciated. Mixed feelings about doing it now. Why is everything in Australia so complicated ?

john in oz

The rules are complex because they involve 2 different countries as well as the Australian Tax rules have really not address the possibility that people may wish to bring large pension sums over.

If the value is over $ 450 K then progressive transfers are required. The current cap limits are $ 150 K per year with a carry forward provision of a total of 3 years which is where the $ 450 k comes into play. Anything more requires progressive transfers over a number of years.

The non concessional caps for super are scheduled to increase from 01 July 2014 - You will need to check at that time what they are.

At this point it is simpler to say get a professional do it otherwise if you get it wrong it will cost you a lot more in tax penalties!

cheers john

Dorothy

Again. This thread is 18 months old and the OP hasn't logged on sin August 2013. Other than advertising your services I can't see any reason you would post in such old threads.

old.sparkles

I have to agree with Dorothy - resurrecting old threads doesn't look good. Feel free to jump in on other threads if you can help, but please stop back searching old posts.

Pollyana

Resurrecting old threads to try and drum up business is not allowed on BE, whether that is business as a migration agent, financial advisor, real estate agent or toothburush seller.
End of.