UK PENSIONS
Mar 12th 2009, 5:28 am
#31
Forum Regular
Joined: Jul 2008
Posts: 238
Re: UK PENSIONS
Final salary schemes vary - you have the potential for some (especially Government FS pensions) to be frozen at the value they were at when you left the UK. There is also the possibility, especially (IMHO anyway) to gain at the moment where the stock market is so low against the potential failure of a FS scheme in the UK (depending on who its with obviously). Presently (again IMO) there is the risk of companies going into liquidation. Yes there is the FS protection scheme, but I personally wouldn't want to try and access that from over here.
Any pension scheme being moved from the UK to Aus has to be moved into a QROPS scheme to meet HMRC requirements, and has to retain its QROPS status for 5 years to avoid taxation issues. Any value also has to be moved within 6 months of arrival, or the gain between the date of arrival and the date of transfer will be taxable so it will very much depend on how long you've been here, your age, length of time to planned retirement, how much you want to move etc. Its an area you really should get professional advice on.
Leaving the funds in the UK mean the restriction to having to buy an annuity etc against not having to here, exposure to FX risk. Its a very, very individual area.
Any pension scheme being moved from the UK to Aus has to be moved into a QROPS scheme to meet HMRC requirements, and has to retain its QROPS status for 5 years to avoid taxation issues. Any value also has to be moved within 6 months of arrival, or the gain between the date of arrival and the date of transfer will be taxable so it will very much depend on how long you've been here, your age, length of time to planned retirement, how much you want to move etc. Its an area you really should get professional advice on.
Leaving the funds in the UK mean the restriction to having to buy an annuity etc against not having to here, exposure to FX risk. Its a very, very individual area.
Mar 12th 2009, 5:42 am
#32
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: UK PENSIONS
Explore the tax treatment more fully ... pension income from the UK in the hands of an Australian resident individual is taxable.
By contrast, income from an Australian pension that derives from transferred UK pension benefits is tax free in the hands of an Australian tax resident.
Looking purely at the tax treatment (which I acknowledge is not the complete picture, particularly with final salary schemes), one would usually transfer the UK scheme benefits to Australia.
Best regards.
By contrast, income from an Australian pension that derives from transferred UK pension benefits is tax free in the hands of an Australian tax resident.
Looking purely at the tax treatment (which I acknowledge is not the complete picture, particularly with final salary schemes), one would usually transfer the UK scheme benefits to Australia.
Best regards.
Mar 13th 2009, 2:30 am
#33
Forum Regular
Joined: Jul 2008
Posts: 238
Re: UK PENSIONS
Explore the tax treatment more fully ... pension income from the UK in the hands of an Australian resident individual is taxable.
By contrast, income from an Australian pension that derives from transferred UK pension benefits is tax free in the hands of an Australian tax resident.
Looking purely at the tax treatment (which I acknowledge is not the complete picture, particularly with final salary schemes), one would usually transfer the UK scheme benefits to Australia.
Best regards.
By contrast, income from an Australian pension that derives from transferred UK pension benefits is tax free in the hands of an Australian tax resident.
Looking purely at the tax treatment (which I acknowledge is not the complete picture, particularly with final salary schemes), one would usually transfer the UK scheme benefits to Australia.
Best regards.
But if longer than 6 months is waited, before the transfer of the UK scheme, is the transfer taxable?
Also, I guess it is no use the Aussie pension being tax free if the super has dropped to nothing??
I think I need to start looking into this a bit more urgently..
Apr 3rd 2009, 8:58 am
#34
Forum Regular
Joined: Dec 2004
Location: Perth
Posts: 40
Re: UK PENSIONS
Hey Spilko,
if your pension transfer to Australia does not happen within 6 months of you becoming a resident, any growth (if there is any) in its value over that period, will be taxable. However, you can elect for your super fund to pay that tax in Australia, which is only levied at 15%.
There are other issues to consider though, as the value of your fund (except the part you pay tax on as per the above) cannot exceed $450K aussie dollars; anything above that will be taxed at 46.5%!!!
It really pays to get some decent advice. Not all financial advisors in Oz are 'shady' (and I would like to think I am one of them).
Scoofy
if your pension transfer to Australia does not happen within 6 months of you becoming a resident, any growth (if there is any) in its value over that period, will be taxable. However, you can elect for your super fund to pay that tax in Australia, which is only levied at 15%.
There are other issues to consider though, as the value of your fund (except the part you pay tax on as per the above) cannot exceed $450K aussie dollars; anything above that will be taxed at 46.5%!!!
It really pays to get some decent advice. Not all financial advisors in Oz are 'shady' (and I would like to think I am one of them).
Scoofy
