winter1

Please do not get caught out by firms sending e-mails remember they are in it for a cut when I looked some were wanting up to 25% of your pot and also if you have been in OZ as a permanent resident for longer than six months then you will have to pay 15% contributions tax on the amount deposited into a QROPs pension. This is assuming that the amount is below certain levels. I was advised to leave my Defined benefit pension in the UK and am now drawing it yes you pay tax but if you also have tax free super you only pay at the marginal rate above the $18000 + limit. However your Aussie Super is not included and doesn't even need to be put on your tax return. Get paid advice it could save you thousands as every bodies situation is different. Remember your UK pensions will probably be index linked guaranteed for life with widows/widowers pension rights. See also these threads as it has been discussed a number of time here. http://www.pomsinoz.com/forum/money-finance/214382-ban-uk-pension-transfers.html http://www.pomsinoz.com/forum/money-finance/217396-uk-pension-transfer.html Just got home after a night out but Ive got a bee in my bonnet about these firms who are in it for themselves and the advice they give is aimed at getting you to transfer.

There are other threads on this have a look at http://www.pomsinoz.com/forum/money-finance/214382-ban-uk-pension-transfers.html There are various reasons why it is being banned, and just because it is is no reason to rush into a transfer as it might not be in your best interests anyway. Treat any advice from a company that specializes in transfers with caution remember they are in it for a cut and sometimes large ones. It is sometimes worth paying for independent advice from a reputable adviser. Andrew from Vista and Alan Collett have been on this site for some time and may be of help. Remember they are banning the transfer of accumulated funds NOT drawing the actual pension when it is due to be paid out. This can be paid to you in Australia and you will receive annual CPI increases unlike the UK Government aged pension which is frozen at the level when you first receive it.

I transferred my UK Armed Forces pension to a UK local government pension. I left the Local Government pension in the UK and am now drawing it. The advice I was given was leave it alone. The employer or the UK government take all the investment risk also there may be other support mechanisms for Armed Forces pensioners. There is also a widows pension associated with this. Google Armed forces pension scheme the gov.UK websites give more info. I have a mix of this and an industry super so I feel I have the best of both worlds which might also be the position you are in. Take advice though for your particular situation but not from firms that do the transfers they will only have their interests at heart. .

Hi Marisa, I got a quote in 2013 but it did not have details of how many years I would get an abatement in the £144 base level for years of contracted out payment. This will not be available till around September as far as I was aware. Did your re-forecast include this information? The original statements from the UK Government led people to believe that you would get the £144 plus any serps or S2p. In practice they have now said there will be deductions from the base £144 to take account of the lower contracted out National insurance contributions you make when you are in an employer pension. You still get the same number of years of NI credited but it buys you a slightly lower annual figure for these years.

Thanks Andrew, It is still not clear what the threshold in number of years you will already have to have made whilst working in the UK to be allowed to make extra voluntary contributions. Currently this is set at 3 years but with the increase to 7 or 10 years this may change. Years ago when I inquired I was allowed to contribute but my wife who had under 11 years was not. I believe that if we were to retire to the UK Her working time in Australia up until 2001 when the reciprocal agreement was cancelled could be counted as credited years. However in Australia this wouldn't count.

Does it show deductions for contracting out years as in if you were in a workplace pension scheme? As there is meant to be deductions from the flat rate "£144" for any year you were in such a scheme. Also any S2P or Serps benefits. I had a forecast last year based on the new scheme but the finer details won't be available till around September this year as far as I was aware. It was also meant to tell you what extra contributions you could make.

I have tried unsuccessfully to find the article that said under the new system from 2016 that you need more than 10 years already credited to be able to contribute for extra years rather than the 3 previously quoted and currently stated on the Directgov website. However I would ask for clarification from DWP before making extra contributions if you only hold less than 10 years credits. As of Autumn in the UK you are meant to be able to get a forecast for the post 2016 pension if you are in your late 50's and early 60's. This forecast should also give an idea of the extra contributions you are allowed to make. There has been criticism that the new pension is an attack on the wives of expats as they can no longer rely on a husbands contributions record, only their own. It is an attempt to deny the pension to many who have no other connection to the UK than by marriage. However it has also caught many UK based spouses who have a poor contribution record. https://www.gov.uk/new-state-pension/overview see this article http://www.thisismoney.co.uk/money/pensions/article-2262134/Flat-rate-state-pension-changes-explained-Winners-losers.html

I believe that under the new rules the number of years to qualify will now be raised to 10 years from 3years and you can only pay extra if you have the minimum of 10. see this article http://www.thisismoney.co.uk/money/pensions/article-2262134/Flat-rate-state-pension-changes-explained-Winners-losers.html

The Local government pension is indexed linked in Australia and they even have to make up some of the loss from the aged pension but only a small amount from the GMP Guaranteed Minimum Pension component. this is the link for the Kent scheme but also applies to all other similar schemes. https://shareweb.kent.gov.uk/Documents/council-and-democracy/pensions/LGPS/LGPS%20NEW/guide-effect-state-pension-LGPS.pdf

I had 21 years in an indexed final salary deferred benefits in a UK local government scheme. When I went to a CPA accountant/FA he said I would be mad to give that up and move it to a defined contributions scheme. What I did was to leave it and I am now drawing it, but at the same time I salary sacrificed into my employers industry based scheme. I feel that the mix of the two types of pension is the best of both worlds. However everybody is different and take advice for your circumstances.

I think the rules say you have to have 11 years of contributions in the UK previously but this may have changed. I paid several years and to get the cheaper class 2 rate you have to be employed by an Australian employer in a permanent role, not self employed. I believe that for me it was worth it but everybody has different circumstances.

I think you will find the remortgage rule is both in Australia and the UK. The reason is because you could keep remortgaging every time your equity rose and claim more tax relief on the same asset. http://www.property118.com/can-i-claim-tax-relief-on-remortgage-interest/61467/ This is a UK view I think the ATO is wise to tax minimisation between spouses in Australia and this may not be allowed. I rented a UK property for 12 years before disposing of it and took my advice from a CPA accountant with UK and Australian credentials. The ATO website does generally have info on this but is down at the moment.

I think you will find that only the interest on the original mortgage is tax deductible not on a remortgage,so this may be an unwise approach. I also strongly urge anyone to declare it on your tax return not only are the penalties heavy if you are caught, but you are also able to negative gear it even though it is not in Australia.

I am not sure but Andrew may be able to answer this, would the premiums for this be tax deductible here in Australia if the policy is valid in Aus?

The qualifying years will increase to 35 from around 2016 when the new flat rate pension comes in. This is to be around 144GBP plus depending on inflation till it is introduced, as opposed to the current 110GBP. It is worth getting a forecast done as you can see what benefits you gain from extra contributions. In my case I only had to pay 3 more years at around 2 pounds a week for class 2 but I assume this will be a bit more now. Your forecast will also tell you if you have any SERPS benefits, this is useful as many people will have built up a substantial extra amount. The UK Government has said that if your current forecast including SERPS is greater than the new flat rate it will honour the higher amount. Mine was already in excess of 160 and many will have more. The only poor thing is it is frozen at the rate when you first draw it. However one day we may see this change as the campaign hots up. For those that doubt that remember many people from India the West Indies and other countries often want to return to their country of birth as they get older, and this would actually be cheaper for the UK as it would save on housing benefits health costs etc. There is a strong campaign going on from these countries which may eventually bear fruit. Also as for means testing the UK pension as it is deemed contributory The European courts have already ruled that anyone paying in is entitled to it, but ruled in favour of the UK government that it can freeze it in certain countries. It would seem almost inconceivable that the UK would means test. It would be political suicide on current expectations, however you can never rule it out entirely. Although the raise in the age it can be drawn at is being raised in steps to 67 in 2028 the rise to 70 in the UK quoted by Joe Hockey is not envisaged till 2060.

Hi Pam, If you have already reached 60 then as a female you will already be able to claim your UK pension and I am assuming also the NHS pension. I note in another post you were already aware of the reciprocal agreement that ended in 2001. You may also like to have a look at this link that shows the UK chancellor has announced the intention to allow anyone retiring before 2016 the ability to top up their UK Basic state pension with a one of payment of £700 for £190 per year increase. This is a one off for a short window. http://www.telegraph.co.uk/finance/personalfinance/pensions/10497646/Autumn-Statement-2013-Over-60s-offered-cheap-state-pension-boost.html I also paid class 2 voluntary contributions for a few years till I reached the 35 year National insurance level for a full pension. not sure what that costs now but it only cost me around £400 in total to get an extra worth around £835 per year in pension at today's rate. may be worth investigating. Good luck

1. I think the point is here that an Australian Occupational Superannuation scheme has tax deducted when you or your employer contribute.. so any money going in is taxed albeit at 15% on concessional contributions. However if you put any money in from a something like a sale of a house or car then you will be putting money in from funds that have been fully taxed. 2. If you remain in Australia this super fund can pay you an income once you turn 60 totally free of income tax. 3. If you move to the UK then it will be taxed as an income stream at normal rates. 4. If instead of putting that money in super you had put it in the bank then you could draw it down whenever you want without it incurring tax. 5.OK you will have received some concessional tax relief on some of it but will still have paid at least 15% on it and may well have paid 30% on it and then you get taxed again in the UK at at least 20%. 6. If you have paid into a UK pension fund whilst working in the UK you get full Tax relief at your highest rate up to 50% so yes it would be fair to pay tax on this as you have already had your tax relief. 7. There are financial instruments in the UK that recognize you have paid tax on certain investments i.e. Purchased Life Annuities (not to be mixed up with common or garden annuities). the question I put was to see if anyone knew if there were certain exemptions on Australian Occupational super. If you have an Australian state pension then I would expect to pay tax on it or any other pension for that matter it is just the way that Australian super is taxed. Maybe it would be fairer to tax it at a sliding scale from 5%.

I am aware of that but there are differences between standard annuities and Purchased Life Annuities. read this link http://www.investmentsense.co.uk/retirement-centre/thinking-about-retirement/purchase-life-annuities/# It may also be wise to get proper advice but this could be an option if you want to protect your capital and unlike standard annuities if you haven't drawn all the money in your pot then your estate will get the balance.

Hi Thistle13, I fully understand how you feel. As I mentioned previously if I decide to leave Oz permanently one of the options would be to draw all the super out after retiring tax free which I believe you can, and take it to the UK and purchase a product in the UK called a "Purchased Life Annuity". This can be drawn down part of the income is recognized as capital and is Tax free only the earnings component is taxed IE interest. The only downside is if you do decide to return to OZ then it becomes taxable in OZ, so you have to be pretty sure the move is permanent.

Thanks for this information

Thanks to fizzybangs and Thistle13 for the considered responses.

If you were to put £20000 in a building society you would expect to pay tax on the interest but you would not expect to pay tax on the capital in the account. This is because you have already paid tax on this when you earned it. This is the same principal as Australian Super is taxed when you contribute to it. You cannot choose which tax regime you obey it is done on residence tests etc. I don't understand the premise "but would get a higher tax free allowance in the UK" is this on contributions or on receipt of income. This either assumes I would be contributing to a pension in the UK, which I won't or that the tax free allowance is greater in the UK which it no longer is under the $18000 dollar tax free threshold from last July. There are vehicles in the UK which recognise this called Purchased life annuities, this is where part of the draw down is deemed capital and is tax free only the investment earnings ie interest is taxed. The original question asked if anybody knew about the tax treatment or had had experience of this situation. many thanks

The Difference here is you received Tax relief when you put your Money in the UK Super. I didn't, I paid tax some at 30% and some at 15%. Surely this is Double Taxation?

Rupert, The point is that it has already been taxed in Australia when it was put into super some at 15% and some at 30%. There is no tax relief for such as in the UK. Also if it is drawn in Australia after the age of 60 it is Tax Free. For example 15% tax going in in Australia 20% tax when taken out in the UK therefore 35% tax on a modest income. The money that was paid in at 30% would then attract 20% on the way out in the UK therefore 50% tax on a modest income. Hardly fair I am looking to see if there are any concessions. I can understand tax on the earnings but not on the Capital.

If I decide to return to the UK and draw my Australian Super from my Australian occupational scheme in the UK, will it be fully taxed in the UK even if I am over 60? I have tried to look for answers to this, but I struggle to find any. The Super Fund I have has some contributions that were taxed at the 15% concessional rate and other contributions that were from fully taxed income. Also a lump sum from the sale of a house which is deemed as taxed income. I believe that taken as a Lump sum it would be tax free but maybe not as an income stream and it might not be wise to remove it from a scheme with a good investment history. If it is taxed in the UK then surely this would be tantamount to Double Tax if it were taxed at the full rate? Also as contributions to a UK Super would attract tax relief at Marginal rates this is doubly unjust. Any thoughts or anyone else done this? Thanks Winter1