I am under the age of 55, Can I transfer my UK pension to Australia?admin
Under current rules, you cannot transfer your UK Pension to a QROPS Super Fund until you reach aged 55. The reason being is that in Australia you are permitted, under certain circumstances, to withdraw funds before age 55 which goes against UK law.
However, you can transfer your UK Pension to our International Expat SIPP. This can be used to set up a future transfer and easy transition into Australian Superannuation when you reach age 55.
What is a QROPS?admin
QROPS stands for ‘Qualifying Recognised Overseas Pension Scheme’. A QROPS is an HMRC registered pension scheme which can accept a transfer of UK pension funds.
In order for an overseas scheme to qualify for ‘QROPS status’, it must meet certain strict criteria set by HMRC. If you transfer your pension to a plan that is not a registered QROPS, you will face a significant penalty so be sure to check that the pension scheme you are intending on transferring to is listed on the HMRC ROPS list.
A full QROPS approved list of schemes can be found here.
If you set up a Self Managed Super Fund, you can apply to HMRC for QROPS registration in order for your fund to accept a transfer of your UK Pension monies but this is a complex and time-consuming process. Alternatively, you can transfer your UK Pension to our Australian Expatriate Superannuation Fund which is Australia’s ONLY Retail Superannuation that is registered with HMRC as a QROPS. This would mean that you can completely avoid the complex registration process as this is all in place with our fund.
Do I pay tax on my Pension Transfer to Australia?admin
When transferring your UK Pension to Australia, you may be subject to a tax charge upon transfer. Tax is based on the investment growth achieved within your UK pension plan, from the date you became an Australian resident, to the date you transferred your UK pension into Australia. It is the growth achieved during this period which would be subject to tax.
If transferring to our Australian Expatriate Superannuation Fund, then you can opt for the tax to be charged at a fixed concessional rate of 15% and we would pay this to the Australian Tax Office, on your behalf, once we receive the transfer of your UK funds.
Overseas pension transfers are classed as ‘non-concessional’ contributions and you are permitted to transfer up to $110,000 plus investment growth, without an excess contribution charge of 45% being applied. In year one, you can bring forward to years of allowance meaning that the initial transfer allowance is $330,000.
What type of UK Pension can I transfer to Australia?admin
You may transfer the following types of UK pension arrangements to an Australian QROPS:
- An Occupational Pension Scheme – A pension offered by your employer, typically a Group Personal Pension.
- A Defined Benefit Scheme – These are schemes offered by your employer which offer a guaranteed benefit in retirement. Also known as Final Salary Schemes.
- A Defined Contribution Scheme – These are Personal or Group Personal Pension Plans. A Self Invested Personal Pension (SIPP) is a Defined Contribution Scheme.
- A Small Self Administered Scheme (SSAS) – This is also a Defined Contribution Scheme, however, the set up of them is a bit more complex.
The following types of UK Pensions are not permitted to transfer:
- UK State Pension
- Unfunded Civil Service Pensions which include NHS, Teachers, Fire Fighters, Police and Armed Forces.
Am I eligible to transfer my UK Pension to Australia?admin
You can transfer your UK Pension to Australia if you meet the following criteria.
- You must be aged between 55 and 75 years. If you are under the age of 55 then you can transfer your Funds to our International Expat SIPP.
- If you are between the ages of 67 and 74, you must meet the criteria of the ‘Work Test’. In summary, you must have been employed for at least 40 hours in a period of not more than 30 consecutive days during the financial year to pass this test. (From 1 July 2022 the age test will change to 75).
- You can only transfer your UK Pension into a scheme that is registered with HMRC as a Qualifying Recognised Overseas Pension (QROPS).
In some cases, you may fit these criteria but there are restrictions with transferring your plan, for example, it could be an NHS Pension Scheme or Teachers Pension which generally do not permit transfers. Our FREE consultation will allow us to understand what pensions you have and the options you have with them.
Do I need a Financial Adviser to transfer my UK Pension to Australia?adminWe would always recommend that you seek financial advice if you are unsure of the implications involved with transferring a pension. However, in some cases, you may be able to transfer your UK pension without the involvement of a Financial Adviser. This would depend on a few scenarios. Firstly, it would be compulsory to involve a Financial Adviser where you are transferring a UK Defined Benefit Pension (i.e. Final Salary) with a value greater than £30,000. Due to the nature of these plans and the guarantees they hold, it is a regulatory requirement from the UK Financial Conduct Authority (FCA) to obtain a Transfer Value Analysis (TVAS) report from a UK Qualified Financial Adviser. Your UK scheme would not allow funds to be transferred out of the scheme without this report. If you are transferring a standard UK Personal Pension, you may do this yourself but we would not recommend this unless you are comfortable with the transfer process and you have a firm knowledge of the investment markets. For many people, their pension is their largest asset for providing income when they retire so it’s important to ensure it's managed correctly and the correct decisions are made, tailored to your financial circumstances and investment objectives.
What are the charges for transferring my UK Pension to Australia?adminThe charges we would apply for administering the transfer of your UK pension to our Australian Expatriate Superannuation fund would be:
- Establishment (Set up) Fee – $595
- Transfer in Fee – $195 per transfer