QROPS and Australian tax

[juliew1499]

My husband and I hope to enter Oz on a 143 contributory parents visa. We are looking at QROPS and have spoken briefly to 2 financial advisors about the basics but seem to get mixed messages. We thought that as permanet residents any income that we withdraw from the Oz super QROPS would not be taxed and that the only tax payable is on growth that the fund makes. As we will be just about reaching pensionable age when we get to Oz this is quite a difficult decision to make. If we don,t do a QROPS then the ATO are going to tax us on all our UK pensions. Is the personal allowance of 18200 the same for all age groups or is there a seniors rate? How helpful are the ATO can you go in and have a talk with someone or is it best to seek advice from an Oz tax accountant?

[Andrew from Vista Financial]

Hi Julie

 

Generally monies transferred to Australia from the UK form what is classed as a tax free component and any withdrawals made from Super that come from the tax free component are tax free regardless of age.

 

Superannuation is taxed at between 10% - 15% on earnings however Superannuation Pensions available to people over the age of 55 are taxed at 0% on earnings.

 

You should be aware that there are different rulings in place in relation to accessing pensions and superannuation between the UK and Australia and this could mean in some cases monies that could have been accessed under UK legislation may not be able to be accessed under Australian legislation.

 

You should also be aware that there is a time period in place whereby if UK monies are transferred to Australia and withdrawals are made over and above what could have been achieved had the funds remained in the UK a breach could occur and a hefty tax penalty apply.

 

The ATO will assess UK Pension income for tax in Australia and as well as the 0% tax free threshold up to $18,200 there are also tax offsets that may apply which can reduce tax payable:

 

http://www.ato.gov.au/Individuals/Income-and-deductions/Offsets-you-can-claim/

 

When are you planning on making the move to Oz and where will you be living?

 

Kind regards

 

Andy

[juliew1499]

Hi Andy

 

Thanks for clearing up some of our queries. We are just about to start the process of applying for the visas and when granted then have to sell our house. our daughter lives in the suburbs of Melbourne and we would hope to live somewhere like Mt Martha or Balnarring down on the Mornington Peninsular. finding our way around the ATO site has now become easier since looking at the link you provided. good to know you can claim health insurance and medical expenses against your income. I still don't understand what the senior offset stuff is all about but assume that is for Ozzies with Aged pensions? As some of our pensions will not be transferable to a QROPS scheme they will have to be paid as UK income. I know Uk and OZ has a double taxation system so that you don't pay tax twice but does that mean that you pay tax in the UK and just show that on your Oz tax return?