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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. Andrew from Vista Financial

    Consolidate super

    Sounds like a plan.
  2. Andrew from Vista Financial

    UK Frozen Pensions

    Hi Ross There should be no issue in posting the link, its a project to assist British expats it really isn't a commercial venture and I understand it to be run by volunteers. I believe that the Chariman Jim Tilley is a member on here, this is the site for other interested in the work they are doing: https://www.bpia.org.au/index.php/about
  3. Andrew from Vista Financial


    Thanks Marisa Hi Nutmeg To try and give some guidance, broadly UK pension income payments are assessed for tax in Australia and taxed accordingly at a persons marginal tax rates (MTR). Any initial lump sum (pension commencement lump sum also referred to in the UK as the 25% tax free lump sum) will also be considered for tax here in Australia and this is typically based on the growth of the lump sum since arrival. An alternative that should be explored is a transfer of the pensions to an Australian Super (QROPS) scheme, as Marisa pointed out there may be some tax to pay with such as transfer in Australia however withdrawals from Super for people over age 60 are tax free so the initial tax impost may be outweighed over time. If you would like to explore potential transfers to Australia we do specialise in this area so feel free to reach out to me offline if you wish: andrew@vistafs.com.au Regards Andy
  4. Superannuation can be used to start an account based pension once a person retires (or meets another condition of release). This allows income to be received as a series of regular payments (usually monthly, quarterly, half yearly, or yearly). If over preservation age but still working, the person may not have full access to superannuation but may be able to start an account based pension under the Transition to Retirement (TTR) rules. A TTR pension may also be referred to as a Transition to Retirement Income Stream, or TRIS. Once a person reaches 65, or informs their super fund that they have met a condition of release before turning 65, their TTR pension becomes a ‘TTR pension in retirement’. This means their pension is subject to the same conditions that apply to an account based pension. Income Payments The person can select how much income to receive each financial year. This allows flexibility to meet individual needs. The only rules for how much pension must be taken are: · An income payment must be made at least once each financial year. · A minimum level of income must be paid each year based on a percentage of the account balance at commencement and each 1 July. If the income stream commences part-way through a financial year, or is commuted before the end of a financial year, the minimum income payment is pro-rated for that year. Age Income Factor(2019/20 & 2020/21) Under 65 2% For a TTR pension, the maximum income is 10% of the account balance and no lump sum withdrawals can be made. The pension will cease when the account balance reduces to nil or the person requests the money be rolled back to accumulation phase or another pension account. The pension can be commuted (stopped) at any time with the money rolled back to accumulation. Withdrawals cannot be made in cash unless a condition of release has been met. Taxation of Income from a TTR Pension Every withdrawal (income or lump sum or death benefit) from a pension is split into taxable and tax-free components in the same ratio that applied when the pension commenced. The tax on each component depends on the person’s age as shown in the table below. Component Taxation Treatment Any age Tax-free No tax 60 or older Taxable – taxed element No tax Taxable – untaxed element Marginal tax rate*, less 10% offset Under age 60 Taxable – taxed element Marginal tax rate*, less 15% tax offset Taxable – untaxed element Marginal tax rate* * Plus Medicare Levy Earnings added to a pension account are taxed at the same rate as applies to the accumulation phase of superannuation.
  5. Andrew from Vista Financial

    Drawing from a UK SIPP

    Hello again Thanks for confirming your residency status. In relation to the tax to pay on the pension income when in draw-down, the taxing rights are held by the ATO on this due to the DTA. The pension should be paid gross from the UK and declared here and will then be taxed in accordance with your marginal tax rate (MTR). You may (or may not) be able to deduct some of the pension payment using the 'Undeducted Purchase Price, there are a few threads on here that cover this (just do a search in the search box), here is one such post: In relation to engaging an Adviser to assist then this is not a Financial Planners domain but an Accountant, if you have an Accountant here they will probably be able to assist as many Accountants have clients who receive UK pensions (just make sure the UPP is explored). IF you have not already drawn on the SIPP then you could explore a transfer to an Australia Super (QROPS) as there may also be merit in that although you may not be able to access the funds if they are transferred at the same time as you can with the SIPP money (however if the overall tax savings are of significance then there might be other strategies to consider to bridge the cash-flow deficit). Hope this helps. Andy
  6. Andrew from Vista Financial

    New financial year to bring new rules for super

    For the 2020–21 financial year, the two main changes are the abolition of the work test for those aged 65 and 66 years old and the extension of spouse contribution for those aged between 70 and 75 years. We are still waiting for a change in legislation that will allow access to the “bring forward” rules. Work test changes Up until 30 June 2020, there was no need for an individual to satisfy a work test for personal concessional and non-concessional contributions before reaching the age of 65. However, once they reached 65 years of age in the financial year, a work test of 40 hours in 30 consecutive days was required to be met at any period during that year, and prior to the contribution being accepted. “Providing the work test is met in a financial year, personal concessional or non-concessional contributions can be accepted up to 28 days after the month in which the person reaches the age of 75. However, there are exceptions to the work test where personal contributions are made in the year after ceasing work, or for purposes of downsizer contributions.” From 1 July 2020, it will be possible for those under the age of 67 years to make personal contributions without needing to satisfy a work test. In the financial year a person reaches the age of 67, personal contributions can be made prior to reaching 67 years old. However, a work test must be met at any time during the financial year prior to the contribution being made. Spouse contributions Up until 30 June this year, it was only possible to make spouse contributions up until the age of 70 years. Between the ages of 65 and 70 years, the spouse was required to meet the work test of 40 hours in 30 consecutive days for the year in which the contribution was made. However, from 1 July 2020, this has now been extended to apply to spouse contributions made between the age of 67 years, and 28 days in the month after the spouse reaches 75 years old, which puts it in line with other personal superannuation contributions. “The work test must be met prior to the spouse contributions being made to the fund.” Reduction in minimum pensions for account-based pensions In late March 2020, the government amended the minimum percentage required to be paid for account-based pensions by 50 per cent. “This meant that account-based pensions, transition to retirement pensions, and market-linked income streams would have their minimum pension percentage reduced by 50 per cent for the 2019–20 and 2020–21 financial years. Read full article here
  7. Andrew from Vista Financial

    Personal Insurance - Updated Education Guide

    Financial planning is about protecting your wealth as well as building your wealth. It is easy to think that you won’t get sick or hurt and ignore the need to protect the very thing that generates your wealth - your own health and your ability to work. But if accident or serious illness does occur the impacts can be devastating. It’s worth remembering that no matter how much expert advice you receive or how well you manage your finances there is always a risk that you could suffer an early death or serious illness or injury. Where that leaves you and your loved ones in the future depends on the wealth protection strategy you have in place. Risks you could face in the future may include: · Emotional, physical or mental trauma · Death or serious illness · Loss of income due to temporary or permanent incapacity · Damage to your house or other personal assets · Theft of, and/or damage to business assets · Public liability and/or professional indemnity risks Your financial plan should include a strategy to minimise risks that could jeopardise both your present and future plans. In simple terms, if you cannot afford to lose something then you should try to protect your exposure. Insurance can provide a cost-effective protection mechanism. This may take a combination of personal, general and health insurance policies. There are many different aspects to insurance and it is best to tailor a package that suits your needs as well as your budget. How the Strategy Works Personal risk insurance protects your wealth accumulation strategy by providing money if you are no longer able to earn an income due to disability, trauma or death. The money received can help with medical bills, loan repayments and living expenses. Many people often underestimate the importance of personal insurance which has led to a problem with underinsurance in Australia. It is important that you consider having enough cover to replace your income and cover expenses so that the personal tragedy does not create financial tragedy. You can apply for insurance to cover you in the event of death, temporary or permanent disability, or trauma (critical illness). Outlined below is a brief outline of types of personal risk insurance. Life Insurance The most common type of cover is life insurance (term life insurance). Life insurance will pay a lump sum to your estate or specific beneficiaries in the event of death or in some cases, on diagnosis of a terminal illness. The advantage of life insurance is peace of mind that your death will minimise any financial hardship for your loved ones. Life insurance can be used to pay off debts, provide an income for dependents, cover funeral expenses and generally assist in maintaining your family’s lifestyle in the event of your death. With this type of cover, your family would not be burdened by debt and may be protected from selling assets to pay debts or cover living expenses. Total and Permanent Disability Insurance Total and Permanent Disablement (TPD) can prevent you from working and require expensive medical treatment and ongoing care. TPD insurance aims to provide a lump sum if you suffer an illness or injury and you: · Are permanently unable to work again or · Are unable to care for yourself independently, or · Suffer significant and permanent cognitive impairment. TPD insurance pays a lump sum which can be used to pay for medical expenses, ongoing care costs and to meet living expenses for you and your family. The definition of TPD can vary and may include options for a range of occupations, including homemakers. Options that you can choose from include: · Any Occupation TPD: The benefit will be paid if you are unlikely to be gainfully employed in any business, profession or occupation for which you are reasonable suited by your education, training or experience. This definition is generally less expensive than an Own Occupation definition but for some people, it may be harder to meet. · Own Occupation TPD: The benefit will be paid if you are unlikely to ever be gainfully employed in your own occupation. Own Occupation TPD provides a generous definition as it is specific to your occupation and is particularly suitable for specialist occupations. The premiums for this type of definition are more expensive than Any Occupation TPD. You should discuss your circumstances with your financial planner. Trauma Insurance A serious illness or injury can prevent you from working for a period of time and may require expensive medical treatment. Trauma insurance (also known as critical illness, crisis or recovery insurance) aims to provide a lump sum upon the diagnosis of a specified illness or injury such as life-threatening cancer, stroke or heart attack. Trauma insurance pays a lump sum that can be used to pay medical expenses and reduce any financial pressure while you focus on recovery. This payment is made regardless of whether you are able to return to work, and is designed to relieve financial pressure at a time when you are under great stress. Child Trauma insurance can be added to your policy to cover a seriously ill or injured child. This provides a lump sum to help you cover medical treatment and eases financial worry for parents who may need to take time off work to provide care. Income Protection Insurance Income Protection insurance aims to minimise the financial impact of sickness or injury by replacing income lost during a prolonged absence from work. A monthly benefit will assist you to meet living expenses and debt repayments. Income Protection policies will usually pay a benefit up to 75% of your gross income (some policies may pay higher) after a waiting period. Payments continue for a set term or until you return to work, whichever occurs first. Waiting period: This is the time period that you must be off work before an income benefit is payable. Waiting periods range from 14 days to two years. Generally, the longer the waiting period, the lower the cost of the income protection insurance. Benefit period: Starting at the end of the waiting period, the benefit period is the maximum time the benefit is paid. Options range from two years, five years or until a specified age such as age 65. Types of contracts include: Agreed value: The monthly benefit is agreed at the time of application and will not reduce even if your income decreases after your policy commenced. This option provides certainty and peace of mind on how much income you will receive. If details of your income are provided at the time of application the benefit can be guaranteed so that no further financial assessment is required at the time of claim. Agreed value contracts are not available to new policy holders from 31 March 2020, however existing policy holders with an agreed value policy will still be able to increase their benefit amount. Indemnity value: The monthly benefit paid depends on your earnings at the time of a claim. If your income at the time of claim is lower than it was when the policy started, the monthly benefit may be reduced accordingly. Details and proof of income will be required at the time of claim. You can generally claim a tax deduction for the premiums paid on an income protection policy (other that any portion of the premium that is attributable to benefits of a capital nature such as physical injury or critical illness) However, income payments received are considered taxable income. Business Expense Insurance Business expense insurance can help to keep your business running if you are unable to work due to temporary illness or injury. This may be particularly appropriate for a sole trader. This type of insurance will usually cover up to 100% of your eligible business expenses, for example rent/lease payments, interest costs, accountant’s fees, telephone, electricity, etc. However, not all expenses are covered so you should check the policy wording before taking out a policy. Alternatively, if you run a larger business you may need to consider life, trauma, TPD or income protection insurance to cover ‘key’ employees or your business partners in case they die or become disabled and are unable to work. This type of insurance protects your business in the event of the loss of a person who makes a significant contribution towards the profitability or stability of the business. As an example, ‘key person’ insurance may provide the business with a lump sum that could be used to either hire a temporary replacement, cover costs of training a new staff member or just compensate the business for any reduction to profit. The premiums may be deductible as a business expense depending on the insurance purpose and the proceeds may also be considered taxable income. Premiums Premiums for all types of personal insurance will vary with age, gender and smoking status. Occupation and medical history may also affect the cost of premiums. Premium options include: Level premiums: The premium rate is fixed when you start the policy and does not change as you get older except in line with CPI indexation. Level premiums are initially higher (than stepped premiums) but will be more stable over time. This can help with affordability and reduce the risk that premiums will become unaffordable as you get older. Stepped premiums: The premium rate increases each year according to you age. Stepped premiums are initially more affordable than level premiums but over time may become more expensive. However, this option can provide you with flexibility as your needs change over time. Your financial adviser can assist in determining which premium option is most appropriate for you. Ownership Life, TPD and income protection policies can be owned personally or through a superannuation fund. Trauma insurance can be owned personally. When held within a superannuation fund, the policy is owned by the trustees of the superannuation fund, for the benefit of the member. When making a choice of how to own the policy you need to consider the advantages and disadvantages of each option. Inside Superannuation In Personal Name Advantages · Premiums are paid using contributions into the fund (e.g. employer contributions) or your superannuation savings – this can help to ease a drain on your cash flow. · Tax concessions on contributions may reduce the effective cost of the premiums (e.g. salary sacrifice to cover the cost of premiums) · In some funds you may be eligible for automatic acceptance (for some cover) which means you will not have to provide evidence of health or income · The claim proceeds are usually tax-free · Claim proceeds will be paid directly to you, your estate or nominated beneficiary as appropriate. This ensures the money is available when you and your family need it · A wider range of benefits and features may be available · Income protection premiums are generally tax deductible Disadvantages · The policies may have less benefits and features than those offered outside superannuation due to legislation restrictions · Tax may be payable on claim proceeds, depending on circumstances and rules at the time · Your disposable income will be reduced as you need to pay premiums from your after-tax income · Premiums need to be paid from after-tax money and so may be a higher cost to you than premiums inside superannuation Taxation How insurance premiums and claim proceeds are taxed will depend on the type of insurance policy and beneficiary, but will also depend on whether you choose to hold the policy inside or outside of superannuation. You should seek specialist taxation advice to check the taxation applicable to your circumstances. Inside Superannuation In Personal Name Premiums · Premiums are deductible to the fund · Not deductible except for income protection policies Claim Proceeds · Life policy – the proceeds are taxable unless paid to tax dependents · TPD – if you are under age 60 when you take this money out of superannuation, tax may be payable · Income protection – the benefits are assessable income to you and are taxed at your marginal tax rate. · The proceeds from a life, TPD or trauma policy are generally tax-free. However, the benefits from an income protection policy are assessable income and taxed at your marginal tax rate Application and Underwriting When applying for insurance you will need to complete an application form providing both personal and medical information so that the underwriter can assess the application. Some applicants may also need to undergo a medical examination and/or blood tests or a report may be requested from their usual doctor to determine whether to accept or decline the cover. Depending on your circumstances and health you may be asked to pay an additional premium, known as a loading, if you have an unfavourable medical history or display higher risk factors for developing chronic illness such as being overweight or high blood pressure. In some cases, the life insurance company may apply an exclusion to your policy. For example, a decision may be made to not cover your for high risk activities and sports or a pre-existing injury/illness. This means that if an event occurs that is excluded, the benefit under the policy will not be paid. Many policies are guaranteed renewable. This means that as long as you pay the premium you will continue to receive cover regardless of any changes in your circumstances or health. If you do not pay your premiums, your insurance will lapse. Some life companies may provide a short window of opportunity to pay your overdue premiums to maintain the cover if you have missed the due date. If your policy lapses and your health or circumstances have changed it may impact on your ability to get the same cover at the same premium. It is important to understand the benefits included in your policy, and optional extras. Benefits included are at no extra cost however optional extras may increase your premium. Your financial adviser can discuss the features of the recommended policy with you.
  8. Andrew from Vista Financial

    Drawing from a UK SIPP

    Hi there Can I ask you firstly if you are a permanent resident/citizen or a temporary resident?
  9. Andrew from Vista Financial

    UK to AUS lump sum payments

    Hello Pete Firstly I am sorry to hear about your Wife, my deepest condolences. In relation to your question and whether we can assist, I am not entirely sure of what you are asking me sorry, perhaps I could ask you to email me directly to Andrew@vistafs.com.au ? Warm regards Andy
  10. Andrew from Vista Financial

    Concessionary Super payments

    And this https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-your-super/Personal-super-contributions/
  11. Andrew from Vista Financial

    Concessionary Super payments

    Hi there. This should help https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Super-contributions---too-much-can-mean-extra-tax/?page=2
  12. Andrew from Vista Financial

    expat equivalent of a UK SIPP

    Hi there If you are 55 or over (and permanent resident and intending to remain in OZ) you could explore a transfer to an Australian Super (QROPS). Other than this you really do not have much choice outside of a SIPP/personal pension (if you are transferring) because if it is not an Aussie QROPS (if eligible) or a UK SIPP/personal pension then you are open to hefty HMRC penalties. There are a few Internationally branded SIPPs in the market place (these are just UK SIPPs marketed to expats) however most of these require an Adviser based in the members country to be appointed. In relation to other non-international SIPPs a lot of these again either require an Adviser to be appointed OR require the member to be based in the UK (or certainly not OZ). So, from this point it will limit your choices but that's not to say it is not possible. There may be one or two members on here that can give some of their own experience in having opened a SIPP unadvised as a UK expat in OZ. Good luck. Andy
  13. Andrew from Vista Financial

    Super second withdrawal?

    Hi Same here I am not aware of the government ruling that there must be a minimum balance left when they introduced the Covid withdrawals but as Ken has mentioned there are some other considerations around low balances and these would be around if the balance falls below $6,000 as they could be classified as inactive (1) and (2) your super fund may look to cancel your insurance again if the balance falls below $6,000. Having contributions paid in to the account would get around the inactive side of things and possibly the insurance issue however it would be best to discuss with your Super Fund as you may be able to opt in to keep the insurance in any event. Super Funds do also have their own set of rules around minimum balances too so as said have a chat with them about your situation in the first instance (or your Adviser). Regards Andy
  14. Andrew from Vista Financial

    Financial advice in North Brisbane

    Hi Phoenix What sort of help do you need regards repatriation of funds? If just in relation to the best way to get cash here then that's not really a financial advice question/issue, most people will use a foreign exchange company to do this and typically they offer better rates than using the banks, Moneycorp is a sponsor of this site so they would be a good start. Regards Pension issues again it would depend on what issues you have, if considering a pension transfer then there are a few Australian Advisers that could assist, if it is in relation to tax issues then you need to speak to an Accountant and if it is particular UK pension product issues maybe your pension provider or a UK Adviser would be the way to go. Regards Andy
  15. Andrew from Vista Financial

    Australian Superannuation

    Hey Michael It's difficult to be able to see any flaws in your plan without knowing about your circumstances in full and goals and objectives. This would include other assets that you may have and the amount of pension you are entitled too as well as and very importantly your retirement income requirements, this may assist you with this one: https://www.superannuation.asn.au/resources/retirement-standard Could you elaborate? Regards Andy