Transferring pension on a Temp 4 yr visa?

[lisa maughan]

Hi

We have just received great news that we have been approved for the long stay working visa (4yrs). Now all the headaches begin!

I currently have a county council superann pension - and am in need of some advice as to whether or not it is worth transferring my pension to oz. I have read that you only have 6 months to transfer the pension if you are a tax resident. Does this mean when you are a permenant tax resident or does this still stand if you are on a temp visa.

I would hate to be in the position of transferring my pension and then if I do have to return to UK - find that there is a problem or tax implication to transfer it back to Uk.

If anyone is a temp long term visa and can help/or any one in the financial "know" - I would be most grateful.

I have just found out our application was successful and we plan to go in January - so I am starting to flap now!

Thanks
Lisa

[Liam]

Hi Lisa

To transfer any UK Pension Benefits to Australia, the following requirements must be met:
- Permanent departure from the UK with no intention of returning to work or retire;
- Employment or self-employment (includes self employed investor i.e anyone under 65) in Australia;
- Australian residency for tax purposes;
- No part of the UK Benefit commenced paying a pension;
- Payment directly from the UK scheme to a 'Qualifying Recognised Overseas Pension Scheme' ("QROPS") and aprroved by APRA in Australia

You can see from the first point that you may not qualify to transfer your pension.

Do not despair!

As you are not sure if you will live here or not then you really should take your time in moving your pension. Yes while the rules are that after 6 months you will be liable for 15% tax on any growth in your UK pension from the date you left, this is only designed to even up the tax position with other Australian residents. In Australia we pay up to 15% tax on the earnings in our Superannuation (pensions) annually while in accumalation phase anyway (thats before we start taking an income or pension from the fund). So all the tax is doing is putting you a similar (slightly worse off after some captal gains tax concessions) position to that which you would be if you moved your money immediately.

If you are not sure that you will be staying then the costs of arranging the transfer here and then back again will be a lot higher in most cases than waiting until you know what your future plans are.

Hope this is of help and remember it is only general advice and should not be relied upon to make a decision. You should seek specific advice for you own personal circumstances.

regards

Liam Shorte

[lisa maughan]

Liam

The information you provided was very useful - thankyou. In the back of my mind I thought the best thing to do would be wait, even though there is a tax implication. But now that you have explained how it "brings one into line with Australians" this far outways any risky movement of my pension to later regret it, if I do end up returning to the Uk.

Thanks once again.

Lisa

[immy21]

This is interesting because I wish to come to Australia on a 165 investor visa which is 4 year temporary but I have no wish to return to the UK and in 4 years intend to apply for permanent residency then citizanship. Should i transfer my pension in a frozen status until I begin work again or should I wait
Thanks for any ideas

[Liam]

Hi Immy

From what I know of the 165 visa they always expect that you have a realistic commitment to continue to maintain a business or investment activity in Australia after the designated visa period.

I would always suggest that you prepare to move your Pension over here but wait until yopu have settled in and are sure it is the place for you. Having to pay 15% tax on growth in your UK pension for for the period may be a a small price to pay for nopt rushing into a decison. so what do I mean by prepare?

1. Contact your pension provider before you leave the UK and ask them for a Payout Letter which shows the amount you could expect to be available for transfer to Australia. Make sure and mention Australia so they know.

2. Ask for the set of their forms that would be required to process the transfer and a list of what they require from a receiving fund (a QROPS or qualifiying registerfed overseas pensions scheme - there are a number to choose from over here)

3. Ask for a person or contact in the Transfer/Payout Department of the company and for an email address and telephone contaact number for that person. (Most compnaies are staffed by Humans! and understand your need for a contact person from so far away).

4. See an adviser in Australia once you have settled in and check there fees and charges for a transfer well in advance of making you final decisons as many people rush into the transfer and end up being shafted for 4% transfer fees. It is only paperwork and the fee should be commensurate with the hours it takes.

regards

Liam

[immy21]

Thanks Liam thats valuable advice
Regards
Andrew