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Andrew from Vista Financial

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Andrew from Vista Financial last won the day on January 20 2017

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About Andrew from Vista Financial

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    Financial (Pensions) Adviser

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  1. The last significant changes to super were made back in July 2017. Since then, things have motored along quite nicely with just some minor tweaking by Government along the way. However, on 1 July 2021, several aspects of super will be changing – for the better, for most. Let us spend few moments looking at just how our super might be changing from 1 July 2021. 1. Superannuation Guarantee Superannuation Guarantee, or SG as it is often known, is the basis of the compulsory superannuation system. Employers are required to contribute a set percentage of their employees’ salary to superannuation, for most employees. The current rate is 9.5% per annum. The rate is set to increase to 10% from 1 July 2021. While many employers pay their employees’ SG on top of their wage or salary, some employees may notice a small reduction in their take-home pay. Where an employee is paid a salary package that includes super, the increase in the SG rate may be absorbed into the total package. That is, the package does not increase, but the amount allocated to SG increases while, at the same time, reducing take-home pay. There can be significant penalties for employers that fail to pay the correct rate of SG to superannuation fir their employers. 2. Concessional contributions Concessional contributions include contributions made by an employer, including SG, and personal contributions made by an individual who is planning to claim a tax deduction for those contributions. Up until 30 July 2021, the cap, or maximum amount of concessional contributions that can be made without incurring a tax penalty is $25,0001 per person. From 1 July 2021, the annual cap will increase to $27,500. 3. Non-concessional contributions Non-concessional contributions are contributions a person makes on their own behalf, or contributions they make for an eligible spouse. These are generally made from after-tax income and are not tax deductible. The annual cap, or limit that applies to non-concessional contributions is $100,000 however, from 1 July 2021, this will increase to $110,000. Provided a person was aged under 65 at the start of the financial year in which they intend to make a non-concessional contribution, they may bring forward up to three years contributions and make non-concessional contributions of up to $300,000 ($330,000 from 1 July 2021). However, there are some restrictions on making non-concessional contributions. Firstly, to be eligible to make a non-concessional contribution, a person must have a total superannuation balance of less than $1.6m. The total superannuation balance is the total of all amounts that person has in superannuation at the end of the previous financial year. From 1 July 2021, the total superannuation balance limit will increase to $1.7m. Therefore, to make a non-concessional contribution in 2021-22, a person will need to have had a total superannuation balance on 30 June 2021 of less than $1.7m. From 1 July 2021, a person aged under 652 on 1 July 2021 will be able to make the following maximum non-concessional contributions using the three-year bring forward arrangement: Total superannuation balance on 30 June 2021 Maximum contribution $1.7m or more $0 $1,590,000 or more, but less than $1,700,000 $110,000 $1,480,000 or more, but less than $1,590,000 $220,000 Less than $1,480,000 $330,000 When wishing to maximise contributions using the three-year bring forward arrangement, it may not be possible to make any further non-concessional contributions during the following two financial years. If intending to make contributions using the three-year bring forward, it is important to seek appropriate financial advice before making any contributions. Exceeding the non-concessional contribution cap can have adverse tax consequences. 4. Transfer balance cap The transfer balance cap is the maximum amount a person can use to commence a retirement pension or income stream within the superannuation environment. The current cap is $1.6m. The transfer balance cap is to be indexed by $100,000 and will increase to $1.7m from 1 July 2021. However, where a person has already commenced a pension and has had amounts counted against their transfer balance cap, only the unused portion of their transfer balance cap will be indexed on a proportionate basis. By way of example, if a person has previously had $1.6m counted against their transfer balance cap, their cap will not be indexed as they have no unused cap. Alternatively, where $800,000 has been previously counted against the transfer balance cap, the 50% of the transfer balance cap remains unused. As a result, the transfer balance cap will increase by $50,000 (i.e., 50% of $100,000), making the unused cap now $850,000. Where to from here? While indexation of certain caps from 1 July 2021 will improve the opportunities for many people, they come with traps for the unwary. When looking to maximise superannuation contributions, or the amount that can be applied to the pension phase of super, seeking appropriate financial advice from a qualified financial planner is highly recommended, to avoid many of the potential pitfalls. 1. Unless a person is eligible to carry forward the unused portion of their concessional contribution cap that has accrued since 1 July 2018. The ability to carry forward the unused portion of the concessional contribution cap is subject to meeting certain conditions. 2. This age limit was due to increase from 1 July 2020 to under 67 at the start of the financial year however, the amending legislation has not been passed yet. By Peter Kelly on 9 June 2021
  2. Andrew from Vista Financial

    UK Pension

    Hello Regards the UK Pension wiping out the Australian Age Pension dollar for dollar this is not the case, I understand it used to be when there was a social security however this ended in 2001: Termination of the Social Security Agreement with the UK - Information for Prospective Migrants | Department of Social Services, Australian Government (dss.gov.au) The way it is considered currently is under the income test: Age Pension - Income test for pensions - Services Australia, essentially any dollar of income (including income from the UK State pension) over the lower threshold reduces the Age Pension by 50c (as Marissa points out above) but if the income reaches the higher threshold (cut of point) then it cuts out completely. However Centrelink also apply an asset test as well: Age Pension - Assets test - Services Australia both tests are carried out and whichever produces the lower result is what the Age Pension payments are based on. So there could be a situation for some in that receipt of the UK State Pension has no bearing on what is received from the Centrelink Age Pension due to the assets test producing the lower outcome. Regards Andy
  3. Andrew from Vista Financial

    Taking my super back to the UK.

    Hi there Thanks for the question however I am a licensed Australian Financial (Tax) Adviser not a UK one so cannot provide advice in this area I am afraid. However looking at your question....does this have any tax implications for my Super. If you did as planned then when you arrive in the UK it would not be Super any longer it would be money in the bank along with any other money you have in the bank when you move back so I think it's unlikely to have any tax implications for your Super. Regards Andy.
  4. Andrew from Vista Financial

    Super payments into a UK bank ?

    Hi AliQ I have never actually looked into whether they can or can't previously so do not have an immediate answer for you I am afraid. Have you asked your Superannuation provider? Regards Andy
  5. Andrew from Vista Financial

    Returning to the UK from Australia - Superannuation Question

    Andy here.......I certainly do, more replying to threads though as opposed to starting them nowadays
  6. Andrew from Vista Financial

    Returning to the UK from Australia - Superannuation Question

    Hi there I am not a visa expert and so am not 100% on the type of visa a 155 is, I have just googled it and it seems as though it is a permanent resident visa? If it is a temporary visa then withdrawal of super for people leaving Australia whose temp visa has expired falls under the DASP: Departing Australia superannuation payment (DASP) | Australian Taxation Office (ato.gov.au) However if it is a permanent visa then the usual conditions of release apply when it comes to withdrawing super (so typically retirement after preservation age Preservation age | Australian Taxation Office (ato.gov.au) Conditions of release can be found here: Conditions of release | Australian Taxation Office (ato.gov.au) Hope this helps. Regards Andy
  7. Andrew from Vista Financial

    Pension ? Taylor Brunswick - Hong Kong

    Hi What are you considering using Taylor Brunswick for may I ask? Are you unhappy with your Pension, ie costs, performance; investment options etc? Are you unable to make an appropriate investment choice yourself? If so then by all means perhaps engage an Advisory practice to advise you accordingly however it's probably best rather than engaging an offshore company (as Marisa says) that you engage either a UK FCA regulated Advisory company or an Australian ASIC regulated Advisory company (but one that is able to advise on other UK pension options). How far away from age 55 are you? Regards Andy.
  8. Andrew from Vista Financial

    UK/Oz financial advisor

    Hi there Would be happy to see if we are able to assist you with this, you can reach us on 8381 7177 by phone or email me direct to andrew@vistafs.com.au and FYI our website is: www.vistafs.com.au Hope this helps. P.S thanks to those above that mentioned us :)
  9. Andrew from Vista Financial

    Superannuation

    Hi again So unfortunately you will not meet a condition of release at that time, to do so it means that you need to be at least preservation age and if under age 65 essentially retired. As Marisa mentioned above perhaps they met a condition of release at the time, it has moved and still is progressively moving upwards as follows: Preservation date of birth and age Preservation age (years) Before 1 July 1960: 55 1 July 1960 – 30 June 1961: 56 1 July 1961 – 30 June 1962: 57 1 July 1962 – 30 June 1963: 58 1 July 1963 – 30 June 1964: 59 After 30 June 1964: 60 The other way that they may have purchased a property with their Super money could have been by setting up a SMSF but it would have had to have been an investment property (this certainly would not work for someone who is looking to leaving Australia for a number of reasons). There is such a thing as the First Home Super Saver Scheme where it's possible to take money from super for purposes of contributing to a home purchase however its not the whole balance that can be withdrawn but rather contributions (which are limited) that have been made: First Home Super Saver Scheme | Australian Taxation Office (ato.gov.au) Hope this helps and sorry it's probably not the answer you are looking for. Regards Andy
  10. Andrew from Vista Financial

    Superannuation

    Hi there How old will you and Husband be prior to leaving Australia? Thanks Andy
  11. Andrew from Vista Financial

    Private Pension transfer with DeVere

    Hi Glad you are happy so far, I also use the L&C SIPP for clients in circumstances where a SIPP is warranted, I believe though that they use an investment bond within the SIPP in a lot of cases (RL 360 tends to be the main one) and this typically pushes up the fees, in fact the FCA issued their concern yesterday about this: Information for consumers on transferring or switching UK pensions into international self-invested personal pensions (SIPPs) | FCA Could I ask where your Adviser is based please? Regards Andy
  12. Andrew from Vista Financial

    Retirement Planning

    We have been working with fellow UK expats here in Australia for over a decade now on helping them plan for their retirement. What does this mean and what do we do? A retirement plan is designed for you based on your desired retirement goals and objectives, for example you may wish to retire at age 65 and with an annual income of $62,828 annually after tax https://www.superannuation.asn.au/resources/retirement-standard This is done by firstly looking at your current financial situation to establish what assets (and liabilities) you have such as: · Superannuation; · Investments; · Savings; · UK Pensions (defined contribution) · Home Loans and other debt Then your income streams in retirement would be considered, such as: · Australian Age Pension (means tested); · UK State Pension (not means tested); · UK Private Pensions (defined benefit) A cashflow analysis is carried out to understand if a surplus income exists and your desired Investor Profile is ascertained. Once done comprehensive financial modelling is conducted so as to determine how things are looking for retirement and whether you are on track or if a gap exists. Following this appropriate recommendations are made on ways to either fill the gap or boost your retirement wealth and this would be by implementing strategies such as: · Making tax deductible contributions to super; · Investing to generate greater returns; · Possibly transferring UK Pensions to an Australian Super Fund or to an International SIPP; · Paying down debt quicker; · Spouse splitting superannuation contributions; · Changing your investment options so that they align to your correct Investor Profiles; · Buying back or topping up years for your UK State Pension; · Commencing a transition to retirement strategy with your superannuation money; · Reviewing current Super Funds/investments to ensure they are correctly invested and performing well. · Reviewing current Super Funds/investments to ensure that the fees are reasonable. After the initial financial (retirement) plan is constructed we will then work with you to implement our recommended strategies and will review your plan with you regularly to ensure it continues to remain on track and recommending any necessary adjustments if need be along the way. If you would like to start planning for your retirement and would like to work with a highly experienced and professional adviser then feel free to get in touch ( andrew@vistafs.com.au ). Thanks Andy
  13. Andrew from Vista Financial

    Retirement Planning

    We have been working with fellow UK expats here in Australia for over a decade now on helping them plan for their retirement. What does this mean and what do we do? A retirement plan is designed for you based on your desired retirement goals and objectives, for example you may wish to retire at age 65 and with an annual income of $61,909 annually after tax https://www.superannuation.asn.au/resources/retirement-standard This is done by firstly looking at your current financial situation to establish what assets (and liabilities) you have such as: · Superannuation; · Investments; · Savings; · UK Pensions (defined contribution) · Home Loans and other debt Then your income streams in retirement would be considered, such as: · Australian Age Pension (means tested); · UK State Pension (not means tested); · UK Private Pensions (defined benefit) A cashflow analysis is carried out to understand if a surplus income exists and your desired Investor Profile is ascertained. Once done comprehensive financial modelling is conducted so as to determine how things are looking for retirement and whether you are on track or if a gap exists. Following this appropriate recommendations are made on ways to either fill the gap or boost your retirement wealth and this would be by implementing strategies such as: · Making tax deductible contributions to super; · Investing to generate greater returns; · Possibly transferring UK Pensions to an Australian Super Fund or to an International SIPP; · Paying down debt quicker; · Spouse splitting superannuation contributions; · Changing your investment options so that they align to your correct Investor Profiles; · Buying back or topping up years for your UK State Pension; · Commencing a transition to retirement strategy with your superannuation money; · Reviewing current Super Funds/investments to ensure they are correctly invested and performing well. · Reviewing current Super Funds/investments to ensure that the fees are reasonable. After the initial financial (retirement) plan is constructed we will then work with you to implement our recommended strategies and will review your plan with you regularly to ensure it continues to remain on track and recommending any necessary adjustments if need be along the way. If you would like to start planning for your retirement and would like to work with a highly experienced and professional adviser then feel free to get in touch ( andrew@vistafs.com.au ). Thanks Andy
  14. Andrew from Vista Financial

    NHS Pension Lump Sum and Tax

    Hi ozni Yes assuming you are a permanent resident/citizen here then typically this lump sum will be assessed for tax based on the growth since you arrived (known as the Applicable Fund Earnings (AFE)). Regards reducing your tax liability by contributing money to Super, possibly (this is not just a strategy available for someone receiving a foreign super lump sum benefit payment it is available to most people looking to reduce their tax liability and maximise their superannuation fund). You may be able to make a voluntary contribution to Super and claim a tax deduction, see here: https://www.ato.gov.au/individuals/super/in-detail/growing-your-super/claiming-deductions-for-personal-super-contributions/ You need to be aware of the concessional contribution caps surrounding this strategy: https://www.ato.gov.au/super/self-managed-super-funds/contributions-and-rollovers/contribution-caps/#:~:text=Concessional contributions also include personal,all individuals regardless of age. There is now also potential to catch up on some previous years concessional contributions if these were not fully used in certain circumstances: https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/?page=3 There are other potential implications to consider also therefore I would suggest you consider seeking professional financial advice for your circumstances. Regards Andy
  15. Andrew from Vista Financial

    Private Pension transfer with DeVere

    Hi there. I'd suggest that you do some googling on DeVere to get some background, they are now based in many countries over the world and work on pretty aggressive marketing tactics (cold calling, trawling through LinkedIn to search for UK expats etc). They usually use an Investment Bond in the SIPP and may also be using funds that they have either an association with or receive some remuneration from (this would be in addition to any Adviser fees and ultimately comes from your money). I am not saying that the actual strategy is not legitimate, many people transfer to SIPPS for various reasons but do your homework (this is obviously one form of that for you). Is Husbands pension currently a defined benefit scheme? If not then it should also be accessible at age 55. Do you really need to access a lump sum at age 55? This is retirement money after all. Were the tax implications of accessing the 25% explained and covered off? Whilst it is UK tax free it certainly isn't Australian tax free (if perm or citizen), the lump sum will be assessed for tax and the amount of tax paid will then depend on the size of pot (not just the 25% lump sum), how long you have been in Australia and your Husbands marginal tax rate. How does accessing this 25% impact on your overall retirement planning? Have you ensured that you will remain on track to meet your retirement goals and objectives (after accessing this so early). Was a transfer to an Australia Super Fund considered (possible at age 55)? Withdrawals from Australian Super are tax free (after age 60) so it should have been explored at the very least as part of your overall retirement plan. Has the Australian tax implications of eventually drawing the pension (income) been explained? Typically pension income from SIPPs are taxed at a persons marginal rate in Australia. That's my input to get you thinking anyway, I'd say if none of the above has been worked through with you then think again because the transfer of a UK Pension should be built on retirement planning as the foundation however if it has then great. Regards Andy.
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