QROPS pension transfer
Apr 12th 2012, 1:20 am
#16
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Re: QROPS pension transfer
Originally Posted by chc4me
Hi Joslin,
Currently, pension transfers are not taking place because previous schemes do not met the requirements to accept transfers and are not registered with the UK athorities as a QROPS. The 10 year rule is only a small part of the changes.
Regarding tax: New migrants have a 4 year exemption from overseas income (such as Pensions). However, you should speak with your account as the fall in the currency may result in a tax refund (often substantial). You would declare the change in value between each year from your annual statements.
If you don't have an accountant or wish to speak to one specialising in this area, you are welcome to contact me or the NZ Institute of Chartered Accountants.
As always, do your own research first.
Regards.
Currently, pension transfers are not taking place because previous schemes do not met the requirements to accept transfers and are not registered with the UK athorities as a QROPS. The 10 year rule is only a small part of the changes.
Regarding tax: New migrants have a 4 year exemption from overseas income (such as Pensions). However, you should speak with your account as the fall in the currency may result in a tax refund (often substantial). You would declare the change in value between each year from your annual statements.
If you don't have an accountant or wish to speak to one specialising in this area, you are welcome to contact me or the NZ Institute of Chartered Accountants.
As always, do your own research first.
Regards.
Apr 12th 2012, 1:34 am
#17
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Re: QROPS pension transfer
Hi Genesis,
This was one of the issues that had previously been raised with the IRD, the point being that final salary schemes were often difficult to obtain such figures from - however this fell on deaf ears.
The answer is to apply for a transfer figure or request a cash equivalent figure from the scheme. Now don't shoot the messenger, but some schemes may charge for this information .... the IRDs view is that you have an obligation and if there is a cost associated with that, then bad luck. While the currency has fallen over the last few years, which is likely to work in your favour, I shudder to think of the potential tax bills if the currency increases. Of course if you transferred the pension fund to a QROPS, then you would no longer have a tax obligation to the IRD. But there are pros and cons about transferring so consider all factors before doing so.
This was one of the issues that had previously been raised with the IRD, the point being that final salary schemes were often difficult to obtain such figures from - however this fell on deaf ears.
The answer is to apply for a transfer figure or request a cash equivalent figure from the scheme. Now don't shoot the messenger, but some schemes may charge for this information .... the IRDs view is that you have an obligation and if there is a cost associated with that, then bad luck. While the currency has fallen over the last few years, which is likely to work in your favour, I shudder to think of the potential tax bills if the currency increases. Of course if you transferred the pension fund to a QROPS, then you would no longer have a tax obligation to the IRD. But there are pros and cons about transferring so consider all factors before doing so.
Apr 12th 2012, 2:14 am
#18
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Re: QROPS pension transfer
Originally Posted by chc4me
Of course if you transferred the pension fund to a QROPS, then you would no longer have a tax obligation to the IRD. But there are pros and cons about transferring so consider all factors before doing so.
Apr 12th 2012, 2:23 am
#19
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Re: QROPS pension transfer
It won't be a short answer ! We've had some financial advice regarding QROPS but I can't remember it now. That's just to bad as it cost a few hundred quid ! However, I do understand it's a one way ticket. If one transfers one's pension overseas, it can't be transferred back
Apr 12th 2012, 2:24 am
#20
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Re: QROPS pension transfer
QROPS = Qualifying Recognised Overseas Pension Scheme. Its a type of pension scheme that can accept transfers from UK Pension companies. Hope that explains it in a nutshell.
Apr 12th 2012, 9:30 pm
#21
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Re: QROPS pension transfer
Originally Posted by chc4me
QROPS = Qualifying Recognised Overseas Pension Scheme. Its a type of pension scheme that can accept transfers from UK Pension companies. Hope that explains it in a nutshell.
cheers chc4me.
That sort of helps
Apr 13th 2012, 3:45 am
#22
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Re: QROPS pension transfer
Originally Posted by chc4me
Hi Genesis,
This was one of the issues that had previously been raised with the IRD, the point being that final salary schemes were often difficult to obtain such figures from - however this fell on deaf ears.
The answer is to apply for a transfer figure or request a cash equivalent figure from the scheme. Now don't shoot the messenger, but some schemes may charge for this information .... the IRDs view is that you have an obligation and if there is a cost associated with that, then bad luck. While the currency has fallen over the last few years, which is likely to work in your favour, I shudder to think of the potential tax bills if the currency increases. Of course if you transferred the pension fund to a QROPS, then you would no longer have a tax obligation to the IRD. But there are pros and cons about transferring so consider all factors before doing so.
This was one of the issues that had previously been raised with the IRD, the point being that final salary schemes were often difficult to obtain such figures from - however this fell on deaf ears.
The answer is to apply for a transfer figure or request a cash equivalent figure from the scheme. Now don't shoot the messenger, but some schemes may charge for this information .... the IRDs view is that you have an obligation and if there is a cost associated with that, then bad luck. While the currency has fallen over the last few years, which is likely to work in your favour, I shudder to think of the potential tax bills if the currency increases. Of course if you transferred the pension fund to a QROPS, then you would no longer have a tax obligation to the IRD. But there are pros and cons about transferring so consider all factors before doing so.
Apr 13th 2012, 3:46 am
#23
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Re: QROPS pension transfer
Originally Posted by Genesis
We have transferred all the pensions we had in the UK to the NZ QROPs scheme and all have been cashed up and are either in NZ dollars or awaiting forex in an NZ based sterling acct. I assume this leaves us void of any NZ tax liability? That is my view on it having looked at all the stuff we did when we went down this route a number of years back. QROPS leaves you with zero taxation SO LONG as you stick to all the rules. I understand there are pros and cons with the QROPS but we decided that a bird in the hand...especially the way the UK is going!!!
Apr 14th 2012, 12:49 am
#24
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Re: QROPS pension transfer
Hi all found this link http://www.ird.govt.nz/resources/c/2...4a30/ir257.pdf
Seems like our pension plans fit the qfpa criteria and as we are not receiving a pension from them there is no need to pay tax.
Comments from those that know better gratefully received.
Seems like our pension plans fit the qfpa criteria and as we are not receiving a pension from them there is no need to pay tax.
Comments from those that know better gratefully received.
Apr 15th 2012, 9:31 pm
#25
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Re: QROPS pension transfer
Hi Joshlin,
Unfortunately UK Pensions fail the QFPA criteria. A representative of the IRD wrote an article in the Chartered Accountants Journal (Feb 2011) which explained which sections of the Income Tax Act apply to foreign pensions and why it fails the test of QFPA.
Please note, this applies to UK Pensions that are still held with a provider in the UK.
Unfortunately UK Pensions fail the QFPA criteria. A representative of the IRD wrote an article in the Chartered Accountants Journal (Feb 2011) which explained which sections of the Income Tax Act apply to foreign pensions and why it fails the test of QFPA.
Please note, this applies to UK Pensions that are still held with a provider in the UK.
Apr 15th 2012, 9:36 pm
#26
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Re: QROPS pension transfer
Originally Posted by Genesis
We have transferred all the pensions we had in the UK to the NZ QROPs scheme and all have been cashed up and are either in NZ dollars or awaiting forex in an NZ based sterling acct. I assume this leaves us void of any NZ tax liability?
Once the Pension is transferred from the UK provider to a QROPS, there is no further UK tax liability on those funds. A New Zealand based Qrops does have tax on investment returns within the fund, so it is not totally tax free (some advertising around this subject can be misleading). Once the funds mature, there is no tax on withdrawals providing you have followed the rules.
