Changes to the Australian superannuation law on 1 July 2017 reduced the options available to individuals in respect of moving their UK Pension to Australia.
The UK pension laws also changed with effect from 9 March 2017, which means that the choices available to individuals are as follows:
- Leave their UK pension in the a UK pension scheme;
- Export their UK pension to a Recognised Overseas Pension Scheme (ROPS) in the country where they are a tax resident; or
- Transfer their UK pension to another country (other than the UK or Australia) and potentially suffer an upfront tax charge of 25% of the UK pension fund on transfer.
If you have a UK pension we can advise you on the best course of action, from a UK and Australian financial and tax perspective.
Key issues to consider are:
How should you access your UK Pension fund? As an annuity? By receipt of a lump sum? By rolling over to a recognised overseas pension scheme that has been approved by HMRC (the UK tax authority)?
What are the UK tax implications for your UK pension?
Are you 55 years old or more and eligible to rollover your UK Pension to a Australian self-managed superannuation fund (SMSF) which is a recognised overseas pension scheme under UK tax law?
Is there Australian tax on the rollover of your UK Pension to an SMSF?
Will your rollover from your UK Pension to an SMSF exceed the non-concessional superannuation cap? From 1 July 2017, the non-concessional superannuation cap is $300,000 (assuming that you are eligible for the three year bring forward rule). In addition, you cannot make a non-concessional superannuation contribution unless you have total superannuation member account balances of less than $1.6 million.
Should you transfer your UK Pension to a recognised overseas pension scheme in another country?
We can provide you with expert advice to help you make the most appropriate decision regarding your UK pension, from a personal, financial and tax perspective, potentially resulting in significant tax savings or more income. There is no need to deal with advisers offshore – you can obtain all of the advice you need here in Australia from qualified reputable professionals.