UK PENSION TRANSFERS POST 6TH APRIL 2015
Jun 17th 2015, 3:09 am
#1
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UK PENSION TRANSFERS POST 6TH APRIL 2015
Many Changes occurred on the 6th April 2015 and in short they include:
1. From aged 55 years of age being allowed to take 100% of your pension as a lump sum; however, 25% is tax free and 75% is still taxed.
2. Unfunded Public Defined Benefit Schemes (Final Salary Schemes) (Police, NHS, Teachers etc) being restricted to transfers to other similar defined benefit schemes only. In simple terms this means that for the majority of transfers from such funds are NO longer possible.
3. Transfers from Funded Public Defined Benefit Schemes (Final Salary Schemes) such as the Local Government Pension Scheme (LGPS) can still be transferred to other schemes.
4. Transfers from Employer funds including Non Public Defined Benefit Schemes (Final Salary Schemes) and Private pension funds are allowable.
5. You are required to obtain Financial Advice from a Qualified UK Adviser when transferring funds from a Defined Benefit Scheme (Private or Funded Public) when the balance is over 30,000 GBP.
6. A transfer offshore must be to a Recognised Overseas Pension Fund.
7. Since the 6th April 2015, the requirements by a overseas receiving pension fund to be compliant to received UK Pensions has changed including the requirement to not release pension funds to anyone under aged 55 years of age except where a person is seriously ill. Many Australian Super Funds currently have additional release clauses which may see them not being able to accept UK Pension Transfers ongoing.
Summary
The new rules allow a lot more freedom to access funds from aged 55. However, for those in unfunded Public Sector Funds will now not be allowed to transfer their UK pension funds to Australia. With the new rules it is anticipated that many Australian funds will not be able to accept UK Pensions in the short term until there is at least a change in regulations either in the Uk or Australia allowing them to do so.
It is important to be aware of the above changes and the impact it has on transfers to Australia. A new HMRC list of acceptable funds will be available from the 1st July 2015. Until then it would be wise to hold off or place on hold any transfers until you have confirmed that the receiving fund is still able to accept UK Funds from the 6th April 2015. A failure to abide by the new rules may see you wear penalty taxes of up to 55%.
At the time of writing it is unclear what the treatment of UK funds are by super funds who are now no longer able to accept funds and have accepted funds prior to and after the 6th of April 2015 where a member has not resided outside the UK for 5 full financial years.
At the end of the day, there is no real change in being able to do transfers to Australia; however, extreme care needs to occur.
Please Contact me if you need further assistance in undertaking your transfers.
1. From aged 55 years of age being allowed to take 100% of your pension as a lump sum; however, 25% is tax free and 75% is still taxed.
2. Unfunded Public Defined Benefit Schemes (Final Salary Schemes) (Police, NHS, Teachers etc) being restricted to transfers to other similar defined benefit schemes only. In simple terms this means that for the majority of transfers from such funds are NO longer possible.
3. Transfers from Funded Public Defined Benefit Schemes (Final Salary Schemes) such as the Local Government Pension Scheme (LGPS) can still be transferred to other schemes.
4. Transfers from Employer funds including Non Public Defined Benefit Schemes (Final Salary Schemes) and Private pension funds are allowable.
5. You are required to obtain Financial Advice from a Qualified UK Adviser when transferring funds from a Defined Benefit Scheme (Private or Funded Public) when the balance is over 30,000 GBP.
6. A transfer offshore must be to a Recognised Overseas Pension Fund.
7. Since the 6th April 2015, the requirements by a overseas receiving pension fund to be compliant to received UK Pensions has changed including the requirement to not release pension funds to anyone under aged 55 years of age except where a person is seriously ill. Many Australian Super Funds currently have additional release clauses which may see them not being able to accept UK Pension Transfers ongoing.
Summary
The new rules allow a lot more freedom to access funds from aged 55. However, for those in unfunded Public Sector Funds will now not be allowed to transfer their UK pension funds to Australia. With the new rules it is anticipated that many Australian funds will not be able to accept UK Pensions in the short term until there is at least a change in regulations either in the Uk or Australia allowing them to do so.
It is important to be aware of the above changes and the impact it has on transfers to Australia. A new HMRC list of acceptable funds will be available from the 1st July 2015. Until then it would be wise to hold off or place on hold any transfers until you have confirmed that the receiving fund is still able to accept UK Funds from the 6th April 2015. A failure to abide by the new rules may see you wear penalty taxes of up to 55%.
At the time of writing it is unclear what the treatment of UK funds are by super funds who are now no longer able to accept funds and have accepted funds prior to and after the 6th of April 2015 where a member has not resided outside the UK for 5 full financial years.
At the end of the day, there is no real change in being able to do transfers to Australia; however, extreme care needs to occur.
Please Contact me if you need further assistance in undertaking your transfers.
Jun 24th 2015, 4:01 am
#2
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Re: Current Update 24.06.15
The current situation has not changed much other to say than some of the larger retail funds have advised HMRC that they will be able to continue accepting UK Pensions.
I am aware that a couple of smaller or government linked pension funds in OZ will not be accepting funds ongoing.
Most funds have simply amended their administrative process to quarantine UK funds from any requests to release funds on financial or compassionate groups should the member be under aged 55. This ensure that they comply with the UK rules.
The new HMRC list will be published on 1st July 2015 to indicate which funds remain compliant with the rules.
if transferring over from the Uk or rolling over your funds from one oz super to another then ensure the receiving fund is HMRC authorised by checking the update list when it become available.
Note: It appears that there are no issues with funds which have been received prior to 6th April 2015 by a compliant fund that is now not authorised post 6th April 2015. However in such cases if you do attempt to access the funds then you need to check with your fund to ensure that you are not subject to any penalty tax from the UK. In all cases regardless you should contact your super fund and ensure there are no known issues especially if you have resided in OZ for less than 6 years.
If you need help just contact me - more updates as things become known.
I am aware that a couple of smaller or government linked pension funds in OZ will not be accepting funds ongoing.
Most funds have simply amended their administrative process to quarantine UK funds from any requests to release funds on financial or compassionate groups should the member be under aged 55. This ensure that they comply with the UK rules.
The new HMRC list will be published on 1st July 2015 to indicate which funds remain compliant with the rules.
if transferring over from the Uk or rolling over your funds from one oz super to another then ensure the receiving fund is HMRC authorised by checking the update list when it become available.
Note: It appears that there are no issues with funds which have been received prior to 6th April 2015 by a compliant fund that is now not authorised post 6th April 2015. However in such cases if you do attempt to access the funds then you need to check with your fund to ensure that you are not subject to any penalty tax from the UK. In all cases regardless you should contact your super fund and ensure there are no known issues especially if you have resided in OZ for less than 6 years.
If you need help just contact me - more updates as things become known.
Aug 1st 2015, 2:31 am
#3
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Re: UK PENSION TRANSFERS POST 6TH APRIL 2015
Current Update for OZ - No change at this time - Treasury are still working on it. Representations have been made by me to the minister's office on this again explaining the urgency on this.
NHS have advised yesterday that if you have a transfer request currently lodged with them to move funds to OZ and the super fund is now not on the list then they will not honour those documents any longer!
I have asked for urgent qualification on this as it was OK for them to hold off for 2 months to get clear direction so it seems very unfair for them to not allow some time for the issues to be resolved as well!!
I will advise on outcomes probably this week on discussions with the NHS.
Unfortunately there is very little feedback coming out of Treasury currently other than to say we are in discussions on this matter.
:-)
NHS have advised yesterday that if you have a transfer request currently lodged with them to move funds to OZ and the super fund is now not on the list then they will not honour those documents any longer!
I have asked for urgent qualification on this as it was OK for them to hold off for 2 months to get clear direction so it seems very unfair for them to not allow some time for the issues to be resolved as well!!
I will advise on outcomes probably this week on discussions with the NHS.
Unfortunately there is very little feedback coming out of Treasury currently other than to say we are in discussions on this matter.
:-)
Oct 11th 2015, 10:32 am
#4
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Re: UK PENSION TRANSFERS POST 6TH APRIL 2015
Hi. I am in the process of moving my UK company pension into a QROPS in Gibraltar. This is all new to me....I would like to hear from expats (not financial advisors) who have done this and to know what their experience is. Thanks in advance from a heatwave in Johannesburg!
Chris
Chris
Oct 12th 2015, 1:51 am
#5
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Re: UK PENSION TRANSFERS POST 6TH APRIL 2015
It just happens that by chance I also move funds into Gibraltar in limited cases so we can use it to effect Foreign Exchange prior to moving to OZ. There maybe some expats here who have done it who can give you some feedback. To get some more feedback you may express why you moved it there as well :-)
Oct 12th 2015, 6:46 am
#6
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Re: UK PENSION TRANSFERS POST 6TH APRIL 2015
John - thanks!
My main reason for moving the pension (DB) from UK is that I got diagnosed with Throat Cancer this year, so my life expectancy is reduced - hence I will lose 50% of my DB pension when I die, whereas with a QROPS i dont!
The reason for Gibraltar is that they charge 2.5% tax on pensions.Further South Africa currently do not tax overseas pensions so it is very tax efficient!
My main reason for moving the pension (DB) from UK is that I got diagnosed with Throat Cancer this year, so my life expectancy is reduced - hence I will lose 50% of my DB pension when I die, whereas with a QROPS i dont!
The reason for Gibraltar is that they charge 2.5% tax on pensions.Further South Africa currently do not tax overseas pensions so it is very tax efficient!
Oct 12th 2015, 9:00 am
#7
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Re: UK PENSION TRANSFERS POST 6TH APRIL 2015
sorry to hear about things. yes UK inheritance tax of 45 % is a big wack out of your pension funds. Also tax is payable in the Uk where other countries may have more tax friendly outcomes. All the best with things.
