UK Pension Transfers
The decision to transfer your UK pension benefits to the Australian Superannuation
system will be one of the major financial decisions you will make and could have
a significant effect on your lifestyle in retirement.
➤ The Facts
UK Pension Funds That Can Be Transferred:
The vast majority of UK pensions can be transferred to Australian Superannuation Funds, providing benefits have not already been taken.
The UK state old age pension cannot be transferred. Regular benefits will be paid directly from the UK once the required retirement age has been achieved.
Current legislation in the UK will allow transfer of pension benefits to Australia and so avoiding the restrictive rules of the UK. Only 25% of the fund is paid tax-free. The remaining 75% of the fund must be used to provide a restricted regular income, which is subject to taxation.
Current or future UK governments could change the legislation due to the loss of substantial amounts of pension money and the associated future taxation.
Once benefits have been transferred, the rules of the Australian Superannuation Fund will apply. All benefits can be withdrawn from age 60 tax-free as either a lump sum or income. (A restriction could apply if you have not been out of the UK tax system for 5 years at age 60).
The fund value on death forms part of your estate and is transferred to the beneficiaries free of taxation.
Upon receipt of a transfer there will be a liability to taxation on any growth of your UK pension whilst you have been resident in Australia.
The tax rate can be capped at 15% and deducted from the pension by the receiving Superannuation Fund. Exemptions to this tax could apply
for further information contact Collins House.
Australian Superannuation Funds
From April 2006 transfers of UK pensions to Australia must be approved by Her Majesty’s Revenue & Customs and can only be transferred
to a Qualifying Recognised Overseas Pension Scheme (QROPS).
Collins House are aware of all Australian Schemes which have QROPS status and will recommend one based on your personal requirements.
All costs will only be implemented on completion of the transfer and can be taken directly from the Superannuation Fund.
The UK has many different types of pensions and the time taken to complete transfer varies considerably. The current timeframe is between 3 – 6 months.
If you would like to discuss obtaining Independent
Financial & Investment Advice, or any of our other
Professional Services, please feel free to contact us.