UK Pension Transfers - Update for 2017
Feb 20th 2017, 1:17 am
#1
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Joined: Jan 2011
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Posts: 455
UK Pension Transfers - Update for 2017
Greetings all,
Pension conditions between countries, different tax treatment, and a number of changes over the years relating to transferring of UK pensions including the options available for those thinking of making a transfer from a UK pension savings scheme, it was thought timely to provide an update on recent changes.
1. Defined Contribution schemes (also known as money purchase schemes) and private final salary schemes CAN be transferred.
2. UK Government funded final salary schemes can not be transferred overseas (NHS, Teachers, etc). We think there might be changes in the future, but right now that's the situation. Those schemes will have to stay put until retirement.
3. If transferring a UK Pension savings scheme to NZ, it must be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS for short).
4. Some KiwiSaver schemes previously qualified, however from 6th of April 2015, KiwiSaver schemes were no longer permitted to receive transfers. This is due to the ability to make withdrawals before age 55 in certain circumstances, such as Financial Hardship and Permanent immigration from NZ. What if you have previously made a transfer to KiwiSaver? No problem, it just continues as before - withdrawals available from age 65.
5. There are approximately 10 qualifying QROPS scheme in New Zealand. Each one has advantages and disadvantages, as well as different fees. Most allow withdraws from age 55, subject to maximum limits.
6. Transfers from a pension scheme to a NZ scheme is a taxable event. If a transfer is made within the first 4 years of arriving in NZ, then no tax is payable on the transfer. After the 4 year anniversary, tax is payable to the NZ IRD based on a sliding scale and the number of years since the end of the 4 year anniversary. More information is available with the IR1024 fact sheet on this issue. If you are a returning resident, or have previously lived in NZ, then you may qualify for a general 4 year exemption. It is important to seek tax advice everytime.
7. Since April 2015, the UK permits 100% withdrawals from a UK Pension scheme directly to the named holder. However this would be taxable event and tax is required to be paid on the FULL amount in New Zealand. This rule may be helpful for investors over age 55 and recently arrived in NZ.
8. From April 2017, full flexibility will be available for withdrawals from NZ QROPS schemes. However, a 10 year member payment provision may apply. This means that if you have been a UK tax resident in any one of the last 10 tax years, then a penalty may apply if you withdrawal more than a 25% lump sum or more than a permitted level of income. While full flexibility does mean you will be able to withdraw the full amount (subject to any penalties) we do strongly recommend to review any financial decision and the potential future impact before acting. (At time of writing, full flexibility is still to be passed into UK law).
This area of financial advice can be quite technical, one question can lead to another and what is right for one person may not be right for another. Please seek advice from a suitable Adviser before making any financial decisions.
Best wishes.
Pension conditions between countries, different tax treatment, and a number of changes over the years relating to transferring of UK pensions including the options available for those thinking of making a transfer from a UK pension savings scheme, it was thought timely to provide an update on recent changes.
1. Defined Contribution schemes (also known as money purchase schemes) and private final salary schemes CAN be transferred.
2. UK Government funded final salary schemes can not be transferred overseas (NHS, Teachers, etc). We think there might be changes in the future, but right now that's the situation. Those schemes will have to stay put until retirement.
3. If transferring a UK Pension savings scheme to NZ, it must be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS for short).
4. Some KiwiSaver schemes previously qualified, however from 6th of April 2015, KiwiSaver schemes were no longer permitted to receive transfers. This is due to the ability to make withdrawals before age 55 in certain circumstances, such as Financial Hardship and Permanent immigration from NZ. What if you have previously made a transfer to KiwiSaver? No problem, it just continues as before - withdrawals available from age 65.
5. There are approximately 10 qualifying QROPS scheme in New Zealand. Each one has advantages and disadvantages, as well as different fees. Most allow withdraws from age 55, subject to maximum limits.
6. Transfers from a pension scheme to a NZ scheme is a taxable event. If a transfer is made within the first 4 years of arriving in NZ, then no tax is payable on the transfer. After the 4 year anniversary, tax is payable to the NZ IRD based on a sliding scale and the number of years since the end of the 4 year anniversary. More information is available with the IR1024 fact sheet on this issue. If you are a returning resident, or have previously lived in NZ, then you may qualify for a general 4 year exemption. It is important to seek tax advice everytime.
7. Since April 2015, the UK permits 100% withdrawals from a UK Pension scheme directly to the named holder. However this would be taxable event and tax is required to be paid on the FULL amount in New Zealand. This rule may be helpful for investors over age 55 and recently arrived in NZ.
8. From April 2017, full flexibility will be available for withdrawals from NZ QROPS schemes. However, a 10 year member payment provision may apply. This means that if you have been a UK tax resident in any one of the last 10 tax years, then a penalty may apply if you withdrawal more than a 25% lump sum or more than a permitted level of income. While full flexibility does mean you will be able to withdraw the full amount (subject to any penalties) we do strongly recommend to review any financial decision and the potential future impact before acting. (At time of writing, full flexibility is still to be passed into UK law).
This area of financial advice can be quite technical, one question can lead to another and what is right for one person may not be right for another. Please seek advice from a suitable Adviser before making any financial decisions.
Best wishes.
Feb 25th 2017, 6:28 am
#2
Forum Regular
Joined: Jun 2009
Location: New Zealand
Posts: 284
Re: UK Pension Transfers - Update for 2017
Thank you chc4me, great info as always.
👌👌👌👌
👌👌👌👌
Greetings all,
Pension conditions between countries, different tax treatment, and a number of changes over the years relating to transferring of UK pensions including the options available for those thinking of making a transfer from a UK pension savings scheme, it was thought timely to provide an update on recent changes.
1. Defined Contribution schemes (also known as money purchase schemes) and private final salary schemes CAN be transferred.
2. UK Government funded final salary schemes can not be transferred overseas (NHS, Teachers, etc). We think there might be changes in the future, but right now that's the situation. Those schemes will have to stay put until retirement.
3. If transferring a UK Pension savings scheme to NZ, it must be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS for short).
4. Some KiwiSaver schemes previously qualified, however from 6th of April 2015, KiwiSaver schemes were no longer permitted to receive transfers. This is due to the ability to make withdrawals before age 55 in certain circumstances, such as Financial Hardship and Permanent immigration from NZ. What if you have previously made a transfer to KiwiSaver? No problem, it just continues as before - withdrawals available from age 65.
5. There are approximately 10 qualifying QROPS scheme in New Zealand. Each one has advantages and disadvantages, as well as different fees. Most allow withdraws from age 55, subject to maximum limits.
6. Transfers from a pension scheme to a NZ scheme is a taxable event. If a transfer is made within the first 4 years of arriving in NZ, then no tax is payable on the transfer. After the 4 year anniversary, tax is payable to the NZ IRD based on a sliding scale and the number of years since the end of the 4 year anniversary. More information is available with the IR1024 fact sheet on this issue. If you are a returning resident, or have previously lived in NZ, then you may qualify for a general 4 year exemption. It is important to seek tax advice everytime.
7. Since April 2015, the UK permits 100% withdrawals from a UK Pension scheme directly to the named holder. However this would be taxable event and tax is required to be paid on the FULL amount in New Zealand. This rule may be helpful for investors over age 55 and recently arrived in NZ.
8. From April 2017, full flexibility will be available for withdrawals from NZ QROPS schemes. However, a 10 year member payment provision may apply. This means that if you have been a UK tax resident in any one of the last 10 tax years, then a penalty may apply if you withdrawal more than a 25% lump sum or more than a permitted level of income. While full flexibility does mean you will be able to withdraw the full amount (subject to any penalties) we do strongly recommend to review any financial decision and the potential future impact before acting. (At time of writing, full flexibility is still to be passed into UK law).
This area of financial advice can be quite technical, one question can lead to another and what is right for one person may not be right for another. Please seek advice from a suitable Adviser before making any financial decisions.
Best wishes.
Pension conditions between countries, different tax treatment, and a number of changes over the years relating to transferring of UK pensions including the options available for those thinking of making a transfer from a UK pension savings scheme, it was thought timely to provide an update on recent changes.
1. Defined Contribution schemes (also known as money purchase schemes) and private final salary schemes CAN be transferred.
2. UK Government funded final salary schemes can not be transferred overseas (NHS, Teachers, etc). We think there might be changes in the future, but right now that's the situation. Those schemes will have to stay put until retirement.
3. If transferring a UK Pension savings scheme to NZ, it must be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS for short).
4. Some KiwiSaver schemes previously qualified, however from 6th of April 2015, KiwiSaver schemes were no longer permitted to receive transfers. This is due to the ability to make withdrawals before age 55 in certain circumstances, such as Financial Hardship and Permanent immigration from NZ. What if you have previously made a transfer to KiwiSaver? No problem, it just continues as before - withdrawals available from age 65.
5. There are approximately 10 qualifying QROPS scheme in New Zealand. Each one has advantages and disadvantages, as well as different fees. Most allow withdraws from age 55, subject to maximum limits.
6. Transfers from a pension scheme to a NZ scheme is a taxable event. If a transfer is made within the first 4 years of arriving in NZ, then no tax is payable on the transfer. After the 4 year anniversary, tax is payable to the NZ IRD based on a sliding scale and the number of years since the end of the 4 year anniversary. More information is available with the IR1024 fact sheet on this issue. If you are a returning resident, or have previously lived in NZ, then you may qualify for a general 4 year exemption. It is important to seek tax advice everytime.
7. Since April 2015, the UK permits 100% withdrawals from a UK Pension scheme directly to the named holder. However this would be taxable event and tax is required to be paid on the FULL amount in New Zealand. This rule may be helpful for investors over age 55 and recently arrived in NZ.
8. From April 2017, full flexibility will be available for withdrawals from NZ QROPS schemes. However, a 10 year member payment provision may apply. This means that if you have been a UK tax resident in any one of the last 10 tax years, then a penalty may apply if you withdrawal more than a 25% lump sum or more than a permitted level of income. While full flexibility does mean you will be able to withdraw the full amount (subject to any penalties) we do strongly recommend to review any financial decision and the potential future impact before acting. (At time of writing, full flexibility is still to be passed into UK law).
This area of financial advice can be quite technical, one question can lead to another and what is right for one person may not be right for another. Please seek advice from a suitable Adviser before making any financial decisions.
Best wishes.
Jun 6th 2017, 8:42 am
#3
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Joined: Jun 2017
Posts: 3
Re: UK Pension Transfers - Update for 2017
I have been dealing with Stuart Bichard from Holborn Assets based in Dubai. I am a kiwi but lived in the UK for 20 years and am now back in NZ. Is there anything I should be concerned about?
Jun 6th 2017, 9:11 am
#4
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Joined: Jan 2011
Location: New Zealand
Posts: 455
Re: UK Pension Transfers - Update for 2017
Yes, you should be very concerned if your adviser recommends any non-New Zealand solution if you are living in NZ and intend to to remain in NZ. This is due to a new 25% tax charge introduced in the UK budget, 9th of March, called the Overseas Tax Charge. There may be other tax issues from the NZ IRD too. Welcome to PM me with any specific questions.
Jun 6th 2017, 9:14 am
#5
Just Joined
Joined: Jun 2017
Posts: 3
Re: UK Pension Transfers - Update for 2017
I have been back in NZ since 2009. does that make any difference??
Jun 6th 2017, 9:49 pm
#6
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Joined: Jan 2011
Location: New Zealand
Posts: 455
Re: UK Pension Transfers - Update for 2017
Hi Morgag, Please see point 6 in the first post of this thread re transfers are a taxable event. There are many factors to consider with UK pensions including the time living in NZ, your age, your future plans, the type of pension you have .... to name a few.
Also, have you researched the company you are dealing with? A quick search of "Holburn assets FCA" might be helpful. The FCA are the UK watchdog for Pensions advice and have strongly recommended investors be very wary of any cold call approaches by pension transfer companies. There appears to be a number of active 'cold calling' companies from Dubai, Hong Kong and Spain.
This area of financial advice can be quite technical, one question can lead to another and what is right for one person may not be right for another. Please seek advice from a suitable Adviser before making any financial decisions.
Also, have you researched the company you are dealing with? A quick search of "Holburn assets FCA" might be helpful. The FCA are the UK watchdog for Pensions advice and have strongly recommended investors be very wary of any cold call approaches by pension transfer companies. There appears to be a number of active 'cold calling' companies from Dubai, Hong Kong and Spain.
This area of financial advice can be quite technical, one question can lead to another and what is right for one person may not be right for another. Please seek advice from a suitable Adviser before making any financial decisions.
Jun 7th 2017, 12:55 am
#7
Just Joined
Joined: Jun 2017
Posts: 3
Re: UK Pension Transfers - Update for 2017
Now I am even more confused 
