SJR

Hi

I would like to transfer my UK pension fund to Australia. My husband also has pensions with a few different companies which he would like to transfer. Does anybody know if we have to do this via an Australian financial adviser or can we do it ourselves?

Sandra

nfernand

you could do it your self. Why not keep the funds in the UK? Well this is what I am doing. I have merged two funds in the UK to one in the UK + my supprer in Aus. £ is better than Aus $ in long run

Latona

hi
weve got to make the same decision soon .what about the capital gains tax that gets charged when you draw on your pension.
thanks denise

Geelong Gent

It is only the gain in value since you become tax resident (there is a period of 6 months that you to get across your fund first).

The gain is then taxed within your fund not on addition to your normal taxable income.

We started the process a week before we arrived and it is still going through the motions (over 12 months later). Problem is you first need a valuation to start working out if it is worth it or not - that is on final salary schemes.

Funds transfered need to be in a recognised fund (some new legislation from the UK - if fund not recognised you are taxed at 40% I think). You then need to hold the fund for miniumum of 5 years then you can transfer to what ever super fund you want.

SJR

Hi

Thanks folks. My initial thought was to leave it in the UK but we've now decided that we'd like to do something a little more speculative, over here. It's a difficult one though, not sure what to do for the best.

Sandra

Mr_Sea-Breeze

I think you will fall foul of the Foreign Investment Fund rules in that case. I am led to believe that the ATO will tax you on the growth in the fund year on year for investments held offshore.

I may be wrong but I suggest you speak to your tax advisor

RRZ

Quite right, you will probably be caught by FIF rules (unless under 50K) - the only exception to FIF in the case of pensions is if they are "employer sponsored" funds. It's a stupid piece of legislation - a lot of people had employer final salary schemes in the UK and transferred out - why should it matter whether it's employer sponsored or personal!

In any event, FIF covers a whole range of things ... including endowment mortgages.

SJR

Thanks for that. So it looks like I'm better leaving it in the UK then. I e-mailed a financial adviser today to ask for their costs re transferring pensions. They charge a huge amount of money!!

Sandra

Techno Freak

Don't pay a financial advisor to transfer your pension over for you - you can do it yourself, it's not difficult.

I have transferred one of my old penions into another one - it's pretty straight forward. They were both in the UK, but it shouldnt be any different to trasnferring it from UK to Australia.

Watch out though - if you are on a permanent residency visa and transfer your fund from the UK to Oz, you cant transfer it back in the future apparently.

Do pay a 'good' financial advisor / tax expert to help you decide whether to transfer it over in the first place.

SJR

Hi, thanks, that's very helpful as it confirms my thoughts on the FA thing. I wasn't aware of the fact that you can't transfer back to the UK in future if you have PR here. We don't have PR at the moment but will be applying later on this year. Re the 6 month period from arriving in Oz and transferring pension (with tax consessions), do you know if this refers to permanent residents?

Sandra

Techno Freak

I have no idea about the 6 month thing, or the 50k thing that was mentioned earlier. My sum total knowledge of pensions was contained in my last post unfortunaley.

SJR

Thanks anyway, your total knowledge was very helpful.

Techno Freak

Glad to be of service.

MartinLuther

The 6 months applies to all (it comes from the original 1936 tax act - a time when there was no concept of PR). You shouldn't concern yourself if you fall foul of it because it only taxes the increase in the fund (less expenses) at 15%. Note that interest bearing investments in an Aussie super would also gets taxed at 15% so in that respect it's a bit of a quid pro quo.

As for some of the other points raised:
- As someone said the FIF rules don't apply to employer sponsored pensions (i.e. Final Salary and COMP pensions). They apply to group pensions and personal pensions. It's not really a stupid rule as the Aus government needs to make sure that the foreign pensions are proper pensions and not some sort of tax avoidance scheme. Remember they have to cater for countries other than the UK. (Although the ATO could be forgiven for thinking the UK is a tax haven )
- You can transfer it yourself and if you have the time or inclination then you should consider it.
- There seems to be a number of Aus super funds that are QROPS certified and thus avoid the UK 40% penalty tax. (Looks like Aus is not the only country worried about people using foreign pensions schemes for tax avoidance.)
- Under QROPS rules you have to keep the money in a QROPS fund for a certain number of years (5 - I think) after taking it out of the UK. Presumably you can move it from 1 QROPS fund to another QROPS fund but don't quote me on it.

Hope this helps.

Mandy&Cliff

Can Confirm it is 5 years but I am trying to find out if its 5 years from the money arriving in OZ or five years from when the person became an Australian TAX resident, any ideas.

And yes you can move it as many times as you like between QROPS Funds.