Services – Uk Pension Transfers
If you are aged 55 or over, then you may well be fortunate enough to be entitled to transfer your UK pensions directly to Australia. This will need to be managed using a QROPS fund to avoid huge tax penalties.
– Simon Harding
UK & Australian Certified Financial Planner®
UK Pensions advice for those now resident in Australia can clearly be separated between the over 55 year olds and the under 55s. This is because in order to meet the UK’s HMRC rules to register as a Qualifying Recognised Overseas Pension Scheme (QROPS) and therefore allow a transfer of UK funds overseas, the membership of the fund must be only allowable for those aged 55 or over.
We will manage the entire process for you, ensuring your best interests are being met at all times.
UK pension transfer to Australia advice, based on knowledge and relevant qualifications not a persuasive sales pitch with the "right" accent
Clear, well-defined and ethical advice around their UK pension options
Advice from a planner with the requisite UK qualifications and holds Certified Financial Planner status in the UK and in Australia
Advice for clients with balances over the non-concessional contribution cap (currently $360,000) that possibly cannot transfer all of their funds to Australia in one movement or do not wish to donate to the ATO
Consolidation of multiple funds in the UK prior to transferring
Australian based Investment portfolios in GBP or AUD depending on your preference
We provide you with access to an SMSF with QROPS status to allow you to have your UK pension fund transferred to Australia.
If your UK pension funds were valued at or over around $360,000 from the day you became an Australian tax resident, then it may not be in your interests to bring them over to Australia in one movement, as this figure breaches the Australian maximum contribution limits.
This is because the Australian Taxation Office (ATO) does not consider a UK pension transfer to Australia as a transfer of existing pension funds, but is, in fact, a new contribution to Australian super. It, therefore, falls within the rules for non-concessional superannuation contributions. Click here for more information.
Currently, you may be permitted to transfer $120,000AUD in any one tax year and by taking advantage of the bring-forward rule you should be able to contribute for the next two years as well. This means that as long as you have not made any non-concessional contributions already and have the full bring forward eligibility you may well be permitted to transfer $360,000 in one transaction.
There are age restrictions placed on the non-concessional contribution eligibility rules and if you are approaching age 75 you ought to seek advice now.
If your UK pension fund exceeds the equivalent $360,000 or you have already used the non-concessional contribution cap then there are specific strategies we could recommend which may mean you will be able to transfer across in tranches over an extended period of time.
This process involves maintaining a UK Self Invested Personal Pension (SIPP) account specifically created for overseas investors. We will still be your adviser and will implement a full investment portfolio in both countries for you.
Several factors should be taken into account when considering transferring your UK pension fund.
Some of the more specific areas include;
If completed correctly and in accordance with UK regulations, there should be no UK tax involved in a transfer to QROPS.
From an Australian perspective, if you transfer your UK pension transfer to Australia after 6 months of tax residency there may be an Australian tax consequence in doing so.
You may be liable for tax on the difference in your fund value on the day you became an Australian resident and the day the funds are received in your Australian QROPS fund. This is called Applicable Fund Earnings.
This tax can either be added to your personal income and taxed at your marginal rate or taxed within the super fund at 15%, whichever is your personal preference.
There is a strict procedure and series of requirements to meet to ensure your fund pays the 15% tax rather than you, at your marginal rate.
When calculating the tax due on transfer, you will need to know the value of the fund on the day you arrived in Australia (or became a tax resident if this differs).
This can be achieved either by asking the UK pension fund for a valuation on a specific date, engaging an actuarial service or by using a discount methodology, as supported by legal precedent.
One of the key advantages of working with us is that we can connect you with the correct independent professional to provide a tax calculation service. This ensures your figures are professionally assessed and clearly documented. Ultimately, as it is you signing the Tax Declaration, you need to be confident that the information provided is accurate and fully supported if ever audited by the ATO.
Most Australian schemes which are established to receive pensions from the UK are SMSFs. This is because standard retail funds lost their QROPS status in April 2015 by allowing membership for the under 55s. Therefore to gain new QROPS status the super fund must agree to only allow membership for over 55s. As an early adopter of this rule, we have access to the correct Corporate Trust Deed using Self Managed Super Funds (SMSF).
We are qualified to provide this service and also to assist you to understand the investment restrictions of a QROPS.
The main advantages of an SMSF are:
The main disadvantages of an SMSF are:
There is currently only one retail QROPS fund available in Australia. As part of our advice process, we will explain the differences including advantages and disadvantages of investing in either a QROPS compliant SMSF or the new retail fund. There are clear advantages for each option and our advice will be specific to your personal circumstances and objectives.
The main advantages of a retail QROPS are:
The main disadvantages of a retail QROPS are:
Working With Us
To ensure we deliver the best value and can focus on delivering highly personalised advice, our services are available to clients aged 55 or over, with total retirement assets (UK pensions and Australian Super) of $700,000 or more. If you meet this requirement, we’d be delighted to discuss how we can help you achieve your financial goals.
If you feel you would benefit from an initial introductory video call we would be delighted to provide you with a brief 30 minute MS Teams or Zoom meeting. Please ensure you meet our eligibility requirements and we can discover whether we are a perfect fit for you.
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Harding Wealth Management Pty Ltd
ABN: 62 603 965 215
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PO Box 2040, Murray Bridge, SA 5253
Harding Wealth Management Pty Ltd (1009142) is a Corporate Authorised Representative and Simon Harding (448420) is an Authorised Representative of HNW Planning Pty Ltd AFSL 225216
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