Returning back to the UK - Superannuation Refunds?

Hello all,

I'm moving back to the UK at the start of February and have a moderately healthy superannuation account. I've been working on a 457 visa for a number of years and I'm trying to find out the best way of getting a refund or transfer of my super account to the UK. I've read about the DASP (Departing Australia Superannuation Payment) and from what I can tell they're going to tax me as much as 40% on my super (pretty annoying). Is getting a refund something that I can just do directly with the ATO or if I go through a tax accountant, could they somehow get a better rate? Any info on this would be much appreciated!

Thanks in advance,

welly

Hey Welly,

I don't know the details of withdrawing it, the ATO may be the best bet or your first stop anyway, your fund should be able to give you some details.. When I moved back to Dublin in 2007, I just left my super here (all consolidated into 1 account), think it was about $60k at the time. If the tax is going to be punitive, it may be worth leaving it here to grow on investment returns and collecting it when you're older. Is this an option for you? It gives you some diversification, although you will wear a currency risk. A good time to be selling AUD and buying GBP but who knows where GBP will go in the future with Brexit etc.

What kind of balance are you talking about and what age are you (ie how long until you can access it through normal channels)? Look for a low fee fund if you go for this option and roll all your balances into 1 account.

Hope this helps (albeit not answering your direct ?)

Hey Welly,

 

I don't know the details of withdrawing it, the ATO may be the best bet or your first stop anyway, your fund should be able to give you some details.. When I moved back to Dublin in 2007, I just left my super here (all consolidated into 1 account), think it was about $60k at the time. If the tax is going to be punitive, it may be worth leaving it here to grow on investment returns and collecting it when you're older. Is this an option for you? It gives you some diversification, although you will wear a currency risk. A good time to be selling AUD and buying GBP but who knows where GBP will go in the future with Brexit etc.

 

What kind of balance are you talking about and what age are you (ie how long until you can access it through normal channels)? Look for a low fee fund if you go for this option and roll all your balances into 1 account.

 

Hope this helps (albeit not answering your direct ?)

Hello Collie! Thanks for your reply and thoughts. Certainly leaving it here would be an option, there's no immediate requirement for it. I had originally hoped that I could just transfer the lot into a UK pension but as the ATO want a fair chunk of it on my departure, which still seems unfair, I guess I'm looking for the best scenario. Balance is about $40k and I'm 43 years old so a while to go before pensionable age!

Ah tough one with that balance. If it was any smaller, I'd say just take it now, larger I'd say leave it. It's borderline.

To give you an idea, $40k would grow to about $100k based on a 5% annual return over 20 years, c. $186k based on an 8% return. The $100/186k would be in 2037 money though so divide by 2 to give you a rough estimate in todays money (ie allowing for inflation). Would fund an awesome holiday back to Aus in 20 odd years though.

Hi

This is the case I'm afraid and the tax is detailed here: https://www.ato.gov.au/individuals/international-tax-for-individuals/in-detail/super/super-information-for-temporary-residents-departing-australia/?page=4#How_and_when_DASP_is_paid

If you have made any voluntary post-tax contributions you will not be taxed on these in the refund but any pre-tax contributions will be taxed at the 38%.

Might not be as bad as it seems, just think that these contributions had they not been paid into super by your employer would have been taxed at your marginal rate anyhow (just trying to help you feel better about the sting, probably doesn't though!).

If you are to leave it here it is very likely you will still have to wear this tax when you do eventually take it out unless you come back to Oz as a permanent resident....temp residents do not have the same conditions of super release as permanent residents/citizens.

Also you can arrange the refund between yourself and your super fund by completing the appropriate ATO forms, an Adviser/Accountant is not mandatory but if you do use one you will not get back an enhanced amount (in fact you will get back less as they will have a fee for their service).

Regards

Andy

Thanks to you both for a bit of advice there, much appreciated! I'll probably leave my super account alone for the time being, I've also got a moderately healthy Kiwisaver account after working in NZ for a while, which I think I'm going to leave alone too for the foreseeable future.

Thank you!

Hi

I've recently returned to the UK after 3 years and have a super with about 90k in it.

When I contacted my Fund, they told me that:

"As a non-resident only option you have now is to claim your benefit as DASP, if you do not claim your benefit now, your benefit will be transferred to the ATO as unclaimed-non resident super monies"

I assume from this that the money does not remain in the fund and therefore is not invested and growing. 

I guess that means that unless one wants to play the game of currency betting that it just makes sense to get the cash out and invest it in the UK.

Has something changed here in terms of the rules here since the OP? It looks to me like I will need to bite the bullet, pay the tax and invest the remaining monies in the UK, especially in light of Andrew's helpful advice above that one would need to pay the income tax on exit anyway and therefore it is unavoidable. Might was well bite the bullet now.....

Andrew, have things changed?

just to say also if you have insurance policies on the super then you can cancel them as they will eat into the funds and are unlikely to be valid as a non resident anyway, but do check.

Hello

In relation to claiming back the money as previously stated the usual condition of release rules do not apply to temp residents, see here:

http://www.mediasuper.com.au/super-withdraw-super/temporary-resident-departing-australia

In relation to the super being transferred to the ATO then this has not always been the case so has changed but has been in place for around 4 years I'd say.

Regards

Andy