New Tax Rules on Pensions

[The Picketts]

Hi there – I wonder if anyone already in Oz can find something out for me. My husband and I are moving to Australia on a Class 410 Temporary Residence visa (Retirement Visa) early September. There has been some press in the UK about the rules for tax on pensions/superannuation being changed in Australia (from July 1st) and that tax is no longer charged on pension income for the over 60’s.
I have spoken to a couple of agents who want to charge 3% of my pension pot to arrange transfer. However, I am still not clear if this benefit would be applicable with our visa class as we are not going to be permanent residents. So, if there is anyone who knows how I can find the answer or who I could contact to find out, it would be much appreciated.

Thanks – Cheryl (The Picketts)

[ali]

Hi don't know the answer, but you could email the guy we saw about our penisons here in Aus:
glen.mumme@lmagroup.com.au -- Les Mumme & Associates --

Sorry can't be more help

Ali

[Alan Collett]

Originally Posted by The Picketts

Hi there – I wonder if anyone already in Oz can find something out for me. My husband and I are moving to Australia on a Class 410 Temporary Residence visa (Retirement Visa) early September. There has been some press in the UK about the rules for tax on pensions/superannuation being changed in Australia (from July 1st) and that tax is no longer charged on pension income for the over 60’s.
I have spoken to a couple of agents who want to charge 3% of my pension pot to arrange transfer. However, I am still not clear if this benefit would be applicable with our visa class as we are not going to be permanent residents. So, if there is anyone who knows how I can find the answer or who I could contact to find out, it would be much appreciated.

Thanks – Cheryl (The Picketts)

Feel able to complete the details here:
http://www.collettandco.com/contact.cfm

I can then send you some information about how I might advise.

Best regards.

[The Picketts]

Thanks Ali and Alan for your speedy responses - I will get on to the addresses you have given me on Monday.

Regards, Cheryl

[TD]

Hi Cheryl
I am in Australia on a 410 visa. It was obtained just before they changed the rules for the 410 last June when they made it even more restrictive. I presume as you are still in the uk that you hold the new 410 (410A ??).
I don;t know if this will help but the UK tax office have advised me that as my visa is only temporary, then I am mainly taxed by the uk, including state and private pensions.
They also keep sending new tax codes for my private pensions.
Also if you look on the net - search engine Australian taxation office, there is informationregarding foreign income exemption for temporary residents.
Bye the way, everyone here is amazed as to how unfair the 410 visa is, no medicare, no seniors card, problems with banks and credit cards, all because the visa is temporary.
The chief planning officer of our local council even told me that I was not allowed to buy a house. Thankfully he was wrong !
Hope this may help.
TD

[Liam]

From 1 July 2007 benefits paid from a taxed source (such as and Australian Super Fund that has accepted the transfer of your UK Pensions), either as a lump sum or pension, will be tax free when paid to members who are age 60 or older. You could therefore transfer your Pensions to Australia (you have 6 months to do so after you arrive without any tax payable) and then start a Pension Income Stream which would be tax free once you are over 60 years of age. You could also take out lump sums tax free but these would need to be reported back to the UK Tax office by your new superfund and therefore you shoudl get tax advice from an accoutant before taking lump sums out. Speak to a planner such as myself before transferring pensions from the UK but ask to paqy a set Fee for the Advice as to whether it is a good option for you in your circumstances (expect to pay around GBP1000 or AUD$2500) and then agree to pay no more than 1.5% for the processing of the Transfer of the actual funds. Do not let anybody scare you into paying above the odds. The system is complicated but in the end it is just a set of proceedures and with proper Tax and Financial Planning Advice it can be arranged within the above costs.

Hope this helps

Liam

[The Picketts]

Thanks everyone for the advice. We have just landed in Perth today on the 410 Visa that was granted in March 2006 so hopefully we will have beaten the increased restrictions. I will certainly be looking to transfer my private pension pot to an Australia scheme and have been told that if I touch the 'pot' during the first five years this will be taxed under the double taxation rules but that any income would be tax free - certainly better than in an annuity in the UK methinks!! At least I can get hold of my pot eventually and not see it disappear into the abyss.

Thanks Liam for your advise - and giving me some idea of what I should be looking for when going through the process.

Regards, Cheryl

[Alan Collett]

Cheryl,

Check the income position - my understanding is that if you transfer a pension to a QROPS super fund in Australia and receive any benefit during a period ending 5 complete UK tax years after your departure from the UK it is reportable by the Australian scheme to the UK Revenue:
Technical Pages: Transfers: Recognised transfers from registered pension schemes: Reporting requirements on transfer to a qualifying recognised overseas pension scheme

You then become liable to a UK tax charge.

Best regards.

[gezz peter]

Hi, myself and my wife are moving to oz, Bunbury in November on a sponsored visa (457)> Can anyone tell me the tax amount that is applicable to my wages each week,month. Or until I apply for pernament resendent. Or the tax percentage I will have to pay.
I have three children and working for Komatsu in bunbury, western Australia.

Your help would be much appreciated.

[Alan Collett]

I suggest you start here: Individuals

And then consider taking professional advice.

Best regards.