chc4me

In general terms, because there are always exceptions to every situation, if the pension remains in the UK, you will pay tax on each payment received. The tax is payable to the NZ IRD at the rate of your marginal tax rate which is likely to be 17.5% OR 30% or 33% depending on your total income at that time.

You will not pay tax in the UK as NZ has a double ta treaty with the uk, but you may need to complete a form.

If you transfer your pension to NZ (into ether a suitable Kiwisaver or a QROPS), then you may have to pay some tax now. While the funds are invested, tax will be deducted within your plan. The advantage is that you will not pay tax on any withdrawals.

chc4me

I think Plent2d was referring to his NHS pension increasing with inflation which is one of the many advantages of a Final Salary scheme.

Mrs Fychan on the other hand is referring to a UK State Pension (which is not transferrable as a lump sum). A UK State Pension does not increase with inflation outside of the E.U. The good news is for ex-pats in NZ, it can be 'swapped' for a NZ state pension (NZ Superannuation) which does increase over time.

Happy days!!

plent2d

Thanks for that, just one thing though, UK pension does increase with inflation when paid in quite a few countries but not in 150 of them, including NZ.

Austins

Hi, we have sent our ITA and are awaiting outcome. I am now looking into our pensions. I have a frozen final salary pension in the UK and and have been pressured by a pension company after checking the surrender value that I should cash it is as soon as possible so as not to incur tax giving them 6% of the total value. Thanks to this thread I have learnt I have four years to make up my mind and not give them a bean if I do it myself. Thanks guys

chc4me

Hi Austin's, welcome to B.E and good luck with the ITA. With comment to your post, behavior from any adviser that pressures the client or gives limited information instead of the full story is shameful. In that situation, i would find out who they are regulated by and make a complaint!

Transferring a pension, or any financial decision for that matter, has to take into consideration a number of factors. Tax is just one component. Your adviser should give you the advantages AND the disadvantages.

All the best,
Chc4me.

Reylan

Hi CHC4ME. I have just read through this thread and wonder if you could just clarify something for me please..... My OH and are are both 56 and have been here for 2 years. We both have a few small private and company pensions in the UK which have been frozen for varying terms now. We've been looking at these changes in 2014 and can't quite decide what's the best thing to do. I realise you aren't able to give individual advice but could you offer any suggestions as to how we investigate whether to transfer these over now or leave them where they are. Thanks a lot.

Rosey1950

Hi chc4me

Have I understood the above correctly, in that we can swap our UK pension to an NZ pension? If this is correct could you let us have some details of how to do this please? many thanks

plent2d

http://www.workandincome.govt.nz/ind...ion-in-nz.html

chc4me

Reyland, you could PM me and I'll assist.

Rosey1950, you can swap your uk State pension for a NZ State pension, called NZ Superannuation. Contact WINZ to arrange. As long as you are aged 65 and permanent resident, you should qualify. There are other threads on this topic with links, but best to call WINZ and get the ball rolling. Let me know if you run into any problems.

Hazelnut

Something I've been pondering is that, if I remain in the UK, I need to be almost 68 years old before I can claim any state pension. If I move to NZ and transfer my state pension can I claim it at 65?

chc4me

You can claim a NZ state pension from age 65 providing you qualify. Copy and paste from the WINZ website.

You may be able to get New Zealand Superannuation if you:
- are aged 65 or over
- are a New Zealand citizen or permanent resident
- normally live in New Zealand at the time you apply.

Hazelnut

Thank-you, looks like that could be a tick on the plus side of the pros and cons then as, if we make the move, I think we'll meet the criteria.

trafford

I have just had a rather worrying thought and hoping someone can help. My mother (82) has lived in NZ since 1977. In 1987 my father died, leaving half of his pension to be paid to her since then. It was a UK final salary pension which she receives from the Merchant Navy Officers Pension Fund, paid monthly. Does she have to declare this? Would she have to pay tax on this (I am unsure whether it has tax paid already in the UK)? There is no way she could afford any sort of lump sum.

chc4me

The tax bill discussed in this thread does not impact your Mum, however NZ does tax worldwide income. If this is a Final Salary Scheme, she should be declaring it for tax in NZ and paying income tax in NZ. Consultant an accountant asap. If tax is deducted in the UK, she would have to claim that back and declare her income in NZ.

If it is a Veterans Pension, my understanding is there may be an exception but to make sure of your Mums responsibilities, I suggest you contact "Veterans Affairs" on 0800 650 656.

trafford

Thanks again chc4me. You're on my speed dial when we arrive in NZ! She has an accountant and I'm pretty sure the tax is sorted out as she got a refund last year (she was so excited! She had a manicure :-). I had that horrible sinking feeling when it first occurred to me. You've put my mind at rest as far as lump sum amounts owed to the tax man.