I am over age 55. Can my UK pension be transferred from the UK to Australia?

Yes. We have solutions in place for over 55’s to transfer their funds to Australia now. This can either be through setting up a Self Managed Super Fund (SMSF) and gaining QROPS compliance or using one of the burgeoning new retail QROPS available. We can advise on which option is more suitable for your own needs and circumstances.

I am under age 55. What options are available to me?

There are many options for you and many reasons to review your situation. Please see our page “Under 55s”.

Are you able to advise me if I have a defined benefit scheme?

The short answer is no, Australian based advisers are not authorised to advise on UK defined benefit schemes. Since April 2015 (UK Pensions Schemes Act 2015) it is now compulsory for a member with defined or safeguarded benefits valued at £30,000 or above to receive advice from a UK based advisory firm before transferring their fund.

We have access to such advice teams and will arrange all the necessary paperwork required. Our point of difference is that Simon was an FCA regulated Pension Transfer Specialist in the UK for over 20 years and is able to ensure these advice reports are accurate and fair. He has the knowledge and experience these complex reports require.

Please do not discount this ability as many of the reports seen by us prior to engaging in this work were massively inaccurate and balanced entirely in favour of a transfer.

Are there any taxes due on my transfer?

Potentially. If you transfer your fund within 6 months of arriving in Australia then there is no tax due. After this period you will be subject to Applicable Fund Earnings tax, which is an Australian Taxation Office (ATO) levied tax and is meant to bring you into line as if you transferred your fund the day you arrived. Effectively it is calculated as a taxation of the difference in your fund value from the date you arrived in Australia to the date you transferred your funds. It is not a tax on the entire balance as some would have you believe.

If you have a defined benefit scheme entitlement the calculation is more difficult to arrive at. We have access to experts in this area who will calculate the tax due, for you. It is not simply a question of discounting your transfer amount by CPI or RPI as often reported. This is simply incorrect and the consequences of incorrectly reporting your tax to the ATO can be severe.

Once the tax due is calculated it can either be added to your income and taxed at your marginal rate or it can be deducted by the fund itself which is commonly the preferred route.

Are there rules around how long I have to be reporting to HMRC in a QROPS?

Yes there are. These rules change as UK legislation changes and personal circumstances will dictate how the legislation affects you. Currently (September 2018) the QROPS fund has an obligation to report for ten complete UK tax years but you as an individual may not. Please contact us for individual advice.

Are there any investment restrictions on my Australian QROPS?

Yes, there most certainly are. There are limitations on what you can invest in from your UK sourced pension. The investment rules simply replicating those rules that applied to the fund when it was domiciled in the UK. If you invest in these assets you will be in breach of the QROPS requirements and tax penalties will apply. Areas to avoid include residential property, holiday homes, timeshares, fine art, antiques, fine wine, jewellery, boats, collectible cars etc. These rules apply to QROPS and former QROPS.

We would be delighted to create an Investment Strategy for you that does not conflict with the HMRC QROPS restrictions.

Can I transfer my UK pension myself?

The honest answer is “It depends”

If your fund is a defined benefit or contains safeguarded benefits and is valued over £30,000 then no, you must seek advice from a UK regulated financial adviser. The Trustees of your scheme will simply refuse to transfer your benefits until you provide evidence that a UK FCA regulated adviser has provided you with advice.

If your fund is a defined contribution scheme such as a Personal Pension then you may be able to complete the process yourself, if you understand all the UK pension and Australian superannuation rules to make sure that you do not pay 55% tax on the transfer. If in any doubt, seek advice.

The disadvantages of this decision are:

  • The administration process is long winded and complex. With our full implementation service we take this burden from you.
  • Accurate calculation of the Applicable Fund Earnings requires expert knowledge and the risk of getting it wrong is very real
  • Failure to comply with ongoing QROPS regulations carries a maximum 55% of the fund value fine
Should I not just leave my pension in the UK?

This really does depend upon your personal circumstances as all situations are different. Be aware though that if you retire in Australia and receive your UK funds as a pension then:

  • You are vulnerable to exchange rate fluctuations for the rest of your life
  • The income you receive from foreign funds such as a UK pension is taxed at your marginal tax rate in Australia and there is no automatic entitlement to a tax free lump sum

This may still be advantageous to you as you need to ask for advice from a UK qualified adviser in Australia to ascertain your best course of action.

I see you are based near Adelaide and I am in Brisbane/Melbourne/Perth/Sydney. How can you properly advise me?

We have based ourselves in the Mclaren Vale wine region for a lifestyle choice. We do also have a permanent office presence in Brisbane CBD and make regular trips to the other CBDs for personal one to one meetings by appointment. Much of our work is also carried out via Skype, Facetime or telephone/email. In our experience the distance has not been an issue as clients prefer to have the right adviser rather than the right location. We have clients we look after in all the major cities.

I am basing my decision on which firm to engage with based on their fees. Are your fees negotiable?

Absolutely, yes. We will price match any firm that can demonstrate the same level of UK and Australian qualifications, relevant experience and advice service offering.

Why is it important you have UK qualifications?

You have UK pension benefits, therefore talk to an adviser qualified to discuss them. We believe it is imperative that you seek advice from an Australian based adviser with the UK Diploma Level 4 and G60 or AF3 accreditation. These are the minimum UK qualifications required in the UK to provide UK Pension Transfer advice. As you are requiring advice about transferring your UK sourced pension fund, it is vital your adviser has an understanding of the pension benefits you are seeking guidance on. The only demonstration of this knowledge is holding the demanding set of appropriate qualifications.

This simply has to be the case when discussing any defined benefit schemes, because if you do not receive the full picture you may make an uninformed decision which you later grow to regret.

Additionally, unlike Australian superannuation, the UK has multiple styles of pension fund, not just defined benefit or defined contribution. There is a whole raft of different contracts that demand specialist knowledge and understanding before considering transferring.

One example is that of a recent client who was approaching his 65th birthday and had a UK pension invested in a With Profits fund. An Australian based adviser with no experience of these funds would have been tempted to recommend a transfer before age 65, to ensure compliance with Australian contribution rules. For this client that would have meant a loss of bonuses of around £5,000 (or $8,000) which more than made up for our fees. We transferred his benefit after the bonus was paid and his 65th birthday because he was able to pass the “Work Test” in Australia.

It is this combination of UK and Australian qualifications that sets our service apart.

If you have not seen the answer to your specific question then please email us your enquiry or perhaps check out our Links page for independent references.