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UK pension transfer

UK pension transfer

Old Jun 17th 2020, 7:41 am
  #16  
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Default Re: UK pension transfer

Originally Posted by Perthscot View Post
your first sentence is correct. Your second sentence is not, you pay 15% tax to the ATO if you transfer. If your annual pension payment is less than 20k AUD then you do not pay any tax.
If you make the maximum non concessional transfer of $100k there is no ATO tax. And obviously if your UK taxable pension is below the Oz tax threshold there is no tax to pay.
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Old Jun 17th 2020, 9:24 am
  #17  
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Default Re: UK pension transfer

Originally Posted by Reasonable View Post
If you make the maximum non concessional transfer of $100k there is no ATO tax. And obviously if your UK taxable pension is below the Oz tax threshold there is no tax to pay.
I’m not sure we’re talking about the same subject? You said if you transfer 100k non concessional there is no ATO tax, it can only be non concessional if you have already paid tax to the ATO.
wee bit confused on what you’re trying to say.
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Old Jul 8th 2020, 5:26 am
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Default Re: UK pension transfer

The 15% taxation on transfer is only on the applicable fund earnings, not the entire transfer. The applicable fund earnings is from your date of arrival to Australia, to when the funds are transferred over.

One of the most compelling reason to transfer a UK pension is in relation to the currency risk. If you do have a defined benefit/final salary scheme, although the pension is guaranteed, this is guaranteed in GBP. This will therefore fluctuate dramatically with the GBP:AUD rate. For example, in March this year, the rate was 2.05, it now sits at 1.80. On just a £10,000 payment, this would result in a $2,500 difference (25,000 - 18,000) in the space of a few months.

Furthermore, defined benefit (DB) transfer values have an inverse relationship with UK GILT yields/Government Bonds i.e. the lower the GILT yield, the higher the DB transfer value. Given where UK interest rates are currently, it could be a very compelling time to look at the transfer value offered by the scheme.


As others have mentioned, a transfer of a UK pension to Australia is expensive, mainly due to the complexity around the transfer. Also, the transfer is one way, so you cannot transfer the funds back to a UK pension scheme. Finally, the funds would be subject to market risk as you have moved out of a guaranteed environment.

If you do engage with an advisor/pension transfer specialist, ensure they are FCA registered (in the UK) and can provide defined benefit advice. Amazulu mentioned 'del boy' characters that have repeatedly cold called him, after requesting them to stop. This is a standard practice for offshore 'pension providers' (those based in Dubai, Hong Kong, Malta etc.) that transfer funds to products that will take undisclosed commissions. As they are offshore, you have no recourse. Amazulu, I expect they got your contact details from LinkedIn? Again, those firms that are FCA registered will likely be more expensive (due to the compliance overlay), but at least the advice is regulated and you have recourse should you believe the firm/adviser did not act in your best interest.

My 2 cents.
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Old Jul 10th 2020, 7:28 am
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Default Re: UK pension transfer

While a DB scheme will require an FCA regd pension transfer specialist, the adviser would have to work with an Australian regd adviser to move part/all of the funds to Australia.

However, there are firms in places like Dubai that are cold-calling people in Australia and recommending the funds are moved to an 'international SIPP' and an Isle of Man insurance bond. These lock in funds to high charges for at least 10 years to fund the undisclosed commissions. No discussion about the possibilities to move the funds to Australia. I have seen 2 cases of this in the last week.
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Old Jul 12th 2020, 12:32 pm
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Default Re: UK pension transfer

Originally Posted by Frankie Deelong View Post
If you do engage with an advisor/pension transfer specialist, ensure they are FCA registered (in the UK) and can provide defined benefit advice. Amazulu mentioned 'del boy' characters that have repeatedly cold called him, after requesting them to stop. This is a standard practice for offshore 'pension providers' (those based in Dubai, Hong Kong, Malta etc.) that transfer funds to products that will take undisclosed commissions. As they are offshore, you have no recourse. Amazulu, I expect they got your contact details from LinkedIn? Again, those firms that are FCA registered will likely be more expensive (due to the compliance overlay), but at least the advice is regulated and you have recourse should you believe the firm/adviser did not act in your best interest.
My phone number is not on linkedin and never has been. All the times I've been called it's been Sydney numbers - which, I know, does not necessarily mean that they're in Sydney. I'm off the firm belief that any financial advisor may have your interests at heart but never your 'best' interest. The 'best' bit is basically for themselves. Nothing wrong with that I guess, they've got to earn a crust - just not my crust! Generally, if I can't do financial stuff myself, it ain't getting done!
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Old Jul 23rd 2020, 5:01 am
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Default Re: UK pension transfer

Originally Posted by Perthscot View Post
I’m considering transferring my UK company defined benefit pension to Australia. I think I know the processes and options. Been talking to a couple of financial advisors but they want a lot of money to do this, up to 25k over five years plus the 15% ATO will take if I set up QROPS.
Has anyone transferred their pension and would like to share their experience?
Any recommendations would be appreciated. Cheers.
Hi, yes i did this exact thing around 5 years ago, had to set up an over 55 SMSF. Then went through a company in Joondalup to organise the transfer, the largest cost was to a UK financial company who carry out an evaluation of what you are investing the DB money into, although i believe that don't have the authority to stop you carrying on with the transfer. I understand this is compulsory and was set up when the UK government allowed early access to your pension pot.
Anyway while this was going through the Brexit vote happend, and the value of my pension dropped dramatically due to the exchange rate going from $2.05 to around $1.45 in a matter of days.
So i transferred my pension into my Westpac account in Pounds Sterling and proceeded to find an Australian company that would invest for me in Pounds Sterling.
Thanks to Alan Collett who i had had dealings with 10 years previously ( he organised our permanent visa application - go matilda ) He informed me about BDH Sterling and they set up a portfolio and invested my pension in Pounds Sterling. That was 3 years ago and i have been waiting for the exchange rate to get back to around $2.00, this happend around January this year so i transferred 50% of my Super from British Pounds to AUD and now have two portfolios one in GBP and one in AUD.
From personal experience i would highly recommend BDH who will do the whole package for you i believe.
One of the main reasons i transferred my pension was that if i was to die and it was in the UK, the government takes a great chunk of the lump sum, where as over here you partner/family get the whole amount.
Also as quoted previously you only pay tax on the amount your pension has increased by, since the day you left the UK, not on the whole amount.
Look some of the rules might have changed since, but if i can be of any more help please feel free to PM me
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Old Jul 23rd 2020, 6:05 am
  #22  
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Default Re: UK pension transfer

Originally Posted by Perthscot View Post
I’m considering transferring my UK company defined benefit pension to Australia. I think I know the processes and options. Been talking to a couple of financial advisors but they want a lot of money to do this, up to 25k over five years plus the 15% ATO will take if I set up QROPS.
Has anyone transferred their pension and would like to share their experience?
Any recommendations would be appreciated. Cheers.
Just to note that you can make a transfer of a SIPP yourself (at zero cost) to your smsf as I did some years ago.
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Old Jul 23rd 2020, 6:07 am
  #23  
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Default Re: UK pension transfer

Originally Posted by Reasonable View Post
Just to note that you can make a transfer of a SIPP yourself (at zero cost) to your smsf as I did some years ago.
How many years ago?

Best regards.
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Old Jul 23rd 2020, 8:48 am
  #24  
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Default Re: UK pension transfer

Originally Posted by Reasonable View Post
Just to note that you can make a transfer of a SIPP yourself (at zero cost) to your smsf as I did some years ago.
Yep absolutly thats what i did. Think my SIPP was with Curtis Bank and financial consultant in the UK who had to evaluate my DB was Christene Keen assoc.
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Old Aug 14th 2020, 2:03 am
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Default Re: UK pension transfer

Joining this late (first post!) but thought I'd throw something into the mix.
Transferred my UK pensions over to Oz back in 2007/08 where there were relatively few restrictions on QROPS transfers.
Looked at it all for ages before committing, but eventually I did.
Looked at using an agent (there were several) to help and got a few quotes. They all ran into several thousands of GBP.
I was shocked - because the benefit of transferring for me was lost if I used an agent.
The agents all made it sound so damned complicated too "I had to be so careful to avoid breaking laws/paying tax/hefty fees"
It turned out that the only hefty fees to be paid were the agent fees.
I met another Brit who just said to me "Do it yourself, it's easy"
Having 4 or 5 private UK pensions, I called them all up, asked for the transfer forms and duly received, completed and returned.
Within 6 months I'd transferred the lot and all it had cost me was the postage fee to send back the forms.
So, my advice is think very carefully before engaging an agent - they're all really expensive and some of them do not have your best interests at heart.
Be brave and check the rules and do it yourself - it is very satisfying.
I did have to make a declaration to the ATO at the end however, which I did, but as long as you keep good records of what you do, it's a breeze.

Finally, to the OP - if you have a defined benefit pension in the UK you should seriously think about leaving it right there.
OK, there may be some currency risk (there is with UK state pension too), but defined benefit pensions are a rare and very valuable thing these days.
Make sure you do not lose it by transferring it.
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Old Aug 14th 2020, 2:06 am
  #26  
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Default Re: UK pension transfer

A lot has changed since you moved your pension fund to Australia ... as you have noted.

Transferring a UK scheme to an Australian super fund is not as available as it used to be.

And you need to be mindful of the tax consequences.

Best regards.
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Old Aug 14th 2020, 2:12 am
  #27  
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Default Re: UK pension transfer

That reply is exactly what all the expensive tax agents were telling me!
The rules have changed a lot (I keep well informed), but the transfer can still be done by the individual - easily.
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Old Aug 14th 2020, 2:31 am
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Default Re: UK pension transfer

Originally Posted by Pint of Pride View Post
That reply is exactly what all the expensive tax agents were telling me!
The rules have changed a lot (I keep well informed), but the transfer can still be done by the individual - easily.
Thanks for your reply, I have spoken to a few “financial advisors” and have decided to leave my DB pension in the UK, take 25% initially and monthly payments for the rest of my life. In my situation I would need to have set up an SMSF, kept it going for at least five years with QROPS approval, engaged advisor for this length of time, paid 15% to ATO, etc. cut a long story short, it would have represented a “loss” of approx 30% of my pension pot in fees and taxes.
i concur with your comments on financial advisors but I can assure you the current rules are not easy to comply with by doing it yourself.
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Old Aug 14th 2020, 2:32 am
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Default Re: UK pension transfer

As you are well informed ... what options do you now have in Australia for the transferring of your UK pension benefits?

And what are the tax consequences of transferring a UK scheme to Australia?

Best regards.

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Old Aug 14th 2020, 2:36 am
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Default Re: UK pension transfer

Originally Posted by Perthscot View Post
Thanks for your reply, I have spoken to a few “financial advisors” and have decided to leave my DB pension in the UK, take 25% initially and monthly payments for the rest of my life. In my situation I would need to have set up an SMSF, kept it going for at least five years with QROPS approval, engaged advisor for this length of time, paid 15% to ATO, etc. cut a long story short, it would have represented a “loss” of approx 30% of my pension pot in fees and taxes.
i concur with your comments on financial advisors but I can assure you the current rules are not easy to comply with by doing it yourself.
FWIW the valuation of defined benefits schemes is relatively high presently given the discounting of the pension to a lump sum at a relatively low interest rate.

I hasten to add that I appreciate the desirability of having a DB scheme. But in most cases the value of that scheme will die with you - or your dependent spouse/partner.

Unlike a super fund in Australia.

Best regards.
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