Bazza Boy

I know there have been a million questions on this. But the search I've made can't find the answer I'm after.

I am 40 years old and lived in Aus for 5 years. My company pension is in the UK - probably doing nothing (but 14 years worth).

Is it worth me bringing it over here and lumping into my Aussie Super?

alanwalker20

hey buddy, i moved over here 15 months ago and im the same age as you. i asked myself the same question and i went to see a finance advisor. We put pen to paper and realised that my best option was to bring it all over here(2 private pensions). Its a start for me as i had no super when i came here and as far as Scottish Widows told me that you can only contribute for a max of 5 years after you leave the country in your private pension as you are not contributing to the UK system...So i got pro advise and they sorted it out for me, its only 48k $ but its better than nothing. One thing you do need to do is go see someone like AMP...only certain companies do this, legal stuff but it comes down to getting the money over into a Qwerps thing and transfering it into a super...my advisor was great and only cost me $1000 for everything, small price to pay for 48k $

Regards..
Alan

Bermudashorts

Anyone that answers that question might as well declare that they can see into the future.

Personally I would not move a pension fund over at the curernt historically low exchange rates, firstly because I could be crystalising a huge FX loss and secondly because I don't know that I will stay here forever anyway. But in due course somebody could quite easily prove that I made the wrong decision.

alanwalker20

well said

I think its one of those individual choices that only YOU can make...as in my case...i'm definately not going back so i choose to bring it over...like i said, it was better than a kick in the teeth, i could have sat on it and waited for things to improve but then again...who knows...

bingobob777

defined benefit or defined contribution?

Kiwipaul

One thing you need to be aware of is that if you don't transfer it within 6 months of arriving it becomes liable to tax when you do transfer it.

I'm sure your advisor told you this however.

Sunshine7

Pretty sure that it's only the actual growth (from the six month date to the date you transfer it) that is liable for tax though (at 15%) - not the whole amount, so not quite as bad as it sounds.

Scotty1

Everyone's circumstances are different, so what may be good for you will not for someone else. Tax treatment is different, exchange rates fluctuate, lots to consider.
For this one you need personal advice based on your circs.
Go see Alan Collett or Prism Expat and understand your position

...and you pay tax on the growth of the fund after you have been here 6 months and not moved it - not the whole fund.

Scotty

Wol

And of course it's the growth in AU$ terms - could be it grows in £ but loses in $.

Bazza Boy

Defined benefit Bob

Scotty1

Afraid if it grows in GBP then that is what you are taxed on - the exchange rate is not taken into account. So if the fund grew 1000 pounds you are taxed on 1000 pounds converted to AUD.

I know this because I have been taxed and have seen the calculation done by the tax person.

I thought you could ofsett the currency issue - but

Bazza Boy

Thanks Scotty.

I would never use Alan Collett, and anyhow - my situation isn't complex.

Been holding out for the GBP to get stronger to be honest with you. But have given up hope of that happening anytime soon.

Might just bite the bullet and transfer. The 15% on money earned since me moving here in 2006 will be fck all - looking at markets then and now.

Am interested what Bob has to say re the Defined benefit or Defined contribution difference. Didn't think it mattered.......

bingobob777

Well with a defined benefit your preserved pension usually rises in line with RPI each year until you retire, therefore the performance of the stock market has no impact on what you will get. However moving it to Oz in to your super fund means it will be at the mercy of the fund manager and become in essence a defined contribution.

for example

I worked for a former employer for 6 years, each year earned 1/60th of my final salary towards a pension. So by the time I left I had accrued 6/60ths of my final salary, giving me a pension of GBP4,000 a year. This rises in line with RPI each year so it's value is preserved (RPI is fudged of course but that's a different subject), so in theory I get 4k a year on retirement.

I enquired about moving it in to a SIPP (Self invested personal pension) in the UK, the transfer pot they offered was 25k, or 6 1/4 years pension. In theory I could invest it and it could grow at 10% a year, but just as likely it could half in value over the next decade. I now have 2 preserved final salary pensions and will be leaving them where they are.

So you need to know what the transfer value is compared to what your preserved pension is to even think about consider moving it.

Kiwipaul

I don't believe it is 15% I believe the gain (in OZ$) would be added to your income for the year when it is transferred and taxed as normal income for that year at whatever your tax rate would be.

Kiwipaul

I'm not sure this is correct because in every other situation you work out the value of your asset in $ when you arrive note the value and then when you move it across you see how much it has gained or lost again in $ and this is what you declare to the taxman.

This is how I do my tax returns anyway and I cannot see why super should be any different.