A few questions on transferring a private pension to Australia

[robertglasgow]

Hi Andrew,

 

Firstly, congratulations on the clarity of the advice on this forum - excellent job in untangling the minefield of rules and regulations.

 

My situation is the following:

After 32 years in the UK, i intend to relocate to Australia, land of my birth, and hence establish normal residency, residency for tax purposes and (in 3 years time) re-establish my domicile as Australia. I have a (private) pension pot of c. £400k and understand most of the rules around moving this to Australia. However, most is not all and I have a few questions:

 

1) If I change tax residency in August 2013, do I still have the right to put in the full £50k per tax year into my pension under HMRC rules, or will this be pro-rataed according to the number of months I was resident in that tax year in the UK?

2) Can I take out in the UK the 25% lump sum and then move the balance to an Australian pension fund? (QOPS), or does this somehow crystalise the pension, preventing it from being moved?

3) I think I can only move $150,000 per year, backdated for 3 years, so $450,000 in total, as long as I do not contribute for the following 2 years. Is this right?Presumably I can leave any balance in the UK pension and draw down from the balance in the UK according to UK pension rules? I guess that this will be subject to Australian tax?

 

Many thanks for your help.

 

Robert

[Andrew from Vista Financial]

Hi Andrew,

 

Firstly, congratulations on the clarity of the advice on this forum - excellent job in untangling the minefield of rules and regulations.

 

My situation is the following:

After 32 years in the UK, i intend to relocate to Australia, land of my birth, and hence establish normal residency, residency for tax purposes and (in 3 years time) re-establish my domicile as Australia. I have a (private) pension pot of c. £400k and understand most of the rules around moving this to Australia. However, most is not all and I have a few questions:

 

1) If I change tax residency in August 2013, do I still have the right to put in the full £50k per tax year into my pension under HMRC rules, or will this be pro-rataed according to the number of months I was resident in that tax year in the UK?

2) Can I take out in the UK the 25% lump sum and then move the balance to an Australian pension fund? (QOPS), or does this somehow crystalise the pension, preventing it from being moved?

3) I think I can only move $150,000 per year, backdated for 3 years, so $450,000 in total, as long as I do not contribute for the following 2 years. Is this right?Presumably I can leave any balance in the UK pension and draw down from the balance in the UK according to UK pension rules? I guess that this will be subject to Australian tax?

 

Many thanks for your help.

 

Robert

 

Hi Robert

 

Thanks for your comments, much appreciated.

 

As your questions are very specific to you as individual answering them would constitue as advice and advice is not permitted without having a thorough understanding of an individuals financial circumstances and carrying out a full assessment of their situation.

 

However, I can give some generals but would urge that you seek professional advice on a personal level especially given the balances involved.

 

In relation to the annual allowance, the tax relief someone can receive wil depend on their Relevant UK Earnings (RUKE) these links should help:

 

http://www.hmrc.gov.uk/manuals/rpsmmanual/RPSM05101120.htm

 

http://www.hmrc.gov.uk/manuals/rpsmmanual/RPSM05101120.htm

 

 

In relation to transferring a Pension after taking the lump sum and subsequently transferring once in Drawdown this may be possible depending on the type of scheme and/or whether the company allows partial transfers overseas.

 

Finally, UK transfers generally fall into the Non-Concessional contributions (NCC's) type, so as you have pointed out currently the annual caps for NCC's is $150,000 (or up to $450,000 can be contributed over a 3 year period in some cases ((age related), see here http://www.ato.gov.au/super/content.aspx?doc=/content/60489.htm&page=4&H4

 

 

Generally, UK Pension income is taxed in Australia if one is an Australian tax resident (different rules apply to temporary residents).

 

 

Robert I hope this helps and as mentioned this is purely general information.

 

 

Regards

 

Andy