Services – QROPS Australia

Transferring Your UK Pension to Australia

If you’ve lived and worked in the UK, you’ve likely built up pension benefits. Once you become an Australian permanent resident, transferring your UK pension to an Australian superannuation fund may be in your best financial interest.

What is a QROPS?

A QROPS (Qualifying Recognised Overseas Pension Scheme) is an overseas pension scheme that meets specific requirements set by His Majesty’s Revenue and Customs (HMRC) in the UK. It must comply with the UK pension rules to maintain QROPS status.

A QROPS fund allows individuals with UK pension funds to transfer their pension to an overseas scheme without triggering an unauthorised payment charge, provided certain conditions are met.

A pension transfer to an Australian super fund that does not have QROPS status could trigger a tax penalty of up to 55% of the fund value.

Why transfer your UK Pension?

One of the key reasons to consider transferring is taxation. Any benefits you receive from a UK pension scheme in retirement—including the UK’s Tax-Free Cash—are taxable by the ATO. Whether or not you pay tax depends on your personal circumstances, but it’s important to plan ahead.

Additionally, leaving your pension in the UK exposes you to lifetime currency fluctuations between GBP and AUD, making long-term financial planning unpredictable. By transferring your pension to Australia, you gain control over your retirement savings in your local currency.

QROPS Restrictions

Both UK and Australian regulations apply when transferring to an Australian QROPS fund.

UK Rules:

You must be aged 55 or over to transfer to an Australian QROPS.
The fund must report to HMRC for ten years (unless other changes occur).
You must keep your funds in your Australian QROPS for at least 10 UK tax years since ceasing UK tax residency and at least five years since transferring the funds (for post-6 April 2017 transfers).
Your investment strategy must comply with UK restrictions—for example, investing in residential property within your QROPS is considered an unauthorised payment and taxed at 55%.

Australian Rules:

You must be over 55 and under 75.
You can contribute up to $120,000 per tax year, or $360,000 in one year using the bring-forward rule.
The transfer amount counted against your contribution limit is the value of your pension the day before you became an Australian tax resident.
Any growth in your pension since becoming an Australian tax resident is classed as Applicable Fund Earnings (AFE) and, if properly elected, can be taxed at 15% within the Australian QROPS fund (instead of your marginal tax rate).

Why Must the Fund Be an Australian QROPS?

In the past, some UK expats were advised to transfer their pensions to QROPS in jurisdictions such as Gibraltar, Malta, or New Zealand. However, since 8 March 2017, HMRC introduced the Overseas Transfer Charge, imposing a 25% tax penalty on transfers that do not go to the country where the individual is tax resident.

For most UK expats in Australia, this means their only viable option is to transfer their UK pension into an Australian QROPS fund.

What Australian QROPS Funds Are Available?

Following the 2015 HMRC rule change requiring Australian QROPS funds to be only accessible to those aged 55 and over, all retail and industry super funds lost their QROPS status. As a result, unless you have a Self-Managed Super Fund (SMSF), your existing Australian super fund is unlikely to accept a UK pension transfer.

Our Full Advice Service Includes:

Establishing your SMSF, ensuring the trust deed is compliant with both UK and Australian pension regulations.
Registering your SMSF as a QROPS with HMRC, a process that typically takes four to eight weeks.
Managing the UK pension release and transfer to your SMSF.
Ongoing advice to ensure compliance with both UK and Australian QROPS regulations.

Are There Any Retail Australian QROPS Funds?

Yes, one retail Australian QROPS fund is currently available. Whether it’s the right option for you depends on your personal circumstances, and we can provide expert advice on its suitability.

If you’re considering a UK pension transfer, we can guide you through every step, ensuring your retirement savings are structured efficiently and remain fully compliant.

Contact us today to discuss your options.