goslar1961

Hi, Just out of interest, both my wife & I are in our 60's. I'm retired and my wife will retire in 2 to 3 years time. Both superannuation accounts are in Oz. If we returned to the UK (permanently) what % of our superannuation balances would we have to pay on leaving Oz? Thanks

Bermudashorts

Wouldn't you just be taking it as an income? In which case you would pay income tax at whatever tax band you fall into.

NickyC

Withdrawals from super are tax-free in Australia (assuming you're retired, of course).

However, the UK will want to tax this as income. You will have the UK personal allowance so depending on how much you receive from your super it may also be tax-free.

goslar1961

Hi Bermudashorts & NickyC, Thank you both for your replies. If withdrawals from s'annuation are tax free in Oz, why aren't they in the UK? (What scenario I am thinking is if both my wife & l returned to the UK, the s'annuation balances would be transferred as lump sums into an UK s'annuation fund)

Bermudashorts

Because UK and Australia have different tax systems.

If the withdrawal is tax free in Australia, the simple solution appears to be to make the withdrawal whilst you are still in Australia?

Amazulu

Seriously?

Just leave it in Australia

Bermudashorts

I would agree that moving a pension pot from Australia into a pension pot in UK, whilst aged in 60s, is not making a lot of sense.

Amazulu

Exactly. You could understand it if your pension was in an unstable country but not Australia

quiltman

UK pension/annuity law has changed. Assuming you can transfer your Oz fund to the UK - as a super fund, then it becomes liable under UK tax law if you are resident. you can take 25% of your fund tax free and now you can also take the rest of it if 55 or over BUT you get taxed! i.e if your fund is £100,000 , you can take £25,000 tax free. If you take any of the balance out you'll be taxed on it.either at 20% or 40% depending on your total income. There are lots of scams going on in the UK trying to persuade people to cash in their super funds and then they get stung with a massive tax bill. As you say you are already retired I presume you are drawing a pension based on your fund? If so, just leave it and get the money transferred to your UK bank.
In UK if you use your fund to purchase an annuity - a regular payment - then you in effect hand over the fund to the annuity company and it :disappears".Both my super funds were "given" to my annuity provider in return for a regular monthly payment.
you would need to talk to a UK tax lawyer to determine the best way forward for both of you.

If you are just talking about moving the funds to the UK WITHOUT taking an income then any interest on it will be taxed , if it's above £1000 per annum.
whether OZ will charge you for withdrawing your funds is down to your fund holder and the law - why not chat to them and ask them?

goslar1961

Hi Amazulu, Bermudashorts & Quiltman, Thanks again for your replies. I had heard that UK pension laws had changed and thought I would see how s'annuation funds were affected. Nothing is ever easy when it comes to money and taxes!

jad n rich

While on pension changes. If living overseas you could make pay several years uk nhs contributions to make up for missed years overseas. Is that option still available?

Wol

My take is that if you withdrew all the super as cash before you moved, the UK tax system wouldn't enter into it, and on moving you would just be transferring your funds there, exactly as the rest of your money.
.

goslar1961

Hi jad n rich & Wol, Thanks for your comments. My questioning about s'annuation transfers was that I had heard of people moving back to UK and the Oz govt taking a slice of the s'annuation as a tax. My wife worked for the NHS before living in Oz. She turned 60 a couple of years ago and the NHS wrote to her advising she was now entitled to her NHS pension. I understand that it is index linked

Swerv-o

Isn't that when they move back following completion of a 457 visa and obtain a payout of their superannuation?

If you are a permanent resident/citizen, then the regulations won't allow any payouts until you reach preservation age, at which point you can either take the lump sum, or invest into a payment stream.

As Wol says, my understanding is that taking the lump sum will mean no further taxation, whereas taking an income stream will require tax to be paid to HMRC


S

quiltman