H283 Posted February 23, 2015 Share Posted February 23, 2015 I am planning to move back to the UK for good in august(ish) My query involves super. I understand I can't take it back with me, but I am worried that the fees will slowly eat away at it until I can withdraw it. Does anyone one know of a super company with no or very low fees who I can transfer it to to minimise the impact of fee on my savings considering I won't be adding to it any more? Or or any other advice on this?! Link to comment Share on other sites More sharing options...
Progressive Posted February 24, 2015 Share Posted February 24, 2015 Not a direct answer but this may help... Just to check, I assume you are a PR or Citizen? Temporary Residents can access their super upon visa cancellation. I actually opted out of moving from 457 visa to PR due to the 'locking in' of four years of super payments and it being simply 'eaten away by fees' as you say. So would be interesting to here people's views on that. If I intended to stay long-term this might have been different, but Australia was always a round trip for me. Link to comment Share on other sites More sharing options...
Huggy75 Posted February 24, 2015 Share Posted February 24, 2015 I see these types of questions all the time and wonder - are we not able to transfer the Aussie pension into a UK one just like you can transfer the UK pension to an Aussie one within the first six months tax-free? Link to comment Share on other sites More sharing options...
Gbye grey sky Posted February 24, 2015 Share Posted February 24, 2015 I see these types of questions all the time and wonder - are we not able to transfer the Aussie pension into a UK one just like you can transfer the UK pension to an Aussie one within the first six months tax-free? No, you cannot. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted February 24, 2015 Share Posted February 24, 2015 I am planning to move back to the UK for good in august(ish) My query involves super. I understand I can't take it back with me, but I am worried that the fees will slowly eat away at it until I can withdraw it. Does anyone one know of a super company with no or very low fees who I can transfer it to to minimise the impact of fee on my savings considering I won't be adding to it any more? Or or any other advice on this?! I dont know if this helps but my OH lived and worked in Oz in the 90s and gained her citizenship in the process. She has lived in the UK for the past 16 years. She still has her Australian Super and even though it is only a small amount it has grown steadily over the years and has certainly not been eaten up by charges. I hear this repeated often and wonder if it is a myth. Has anyone actually had a Super fund that was eaten up by charges? Now she is planning to return she can benefit from this as she can transfer her UK pension into the Super account but even if that had not happened she could still have taken all the money at 60. Yes, there would have been tax to consider if she had been in the UK but it was money the employer contributed anyway. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted February 24, 2015 Share Posted February 24, 2015 I dont know if this helps but my OH lived and worked in Oz in the 90s and gained her citizenship in the process. She has lived in the UK for the past 16 years. She still has her Australian Super and even though it is only a small amount it has grown steadily over the years and has certainly not been eaten up by charges. I hear this repeated often and wonder if it is a myth. Has anyone actually had a Super fund that was eaten up by charges? Now she is planning to return she can benefit from this as she can transfer her UK pension into the Super account but even if that had not happened she could still have taken all the money at 60. Yes, there would have been tax to consider if she had been in the UK but it was money the employer contributed anyway. Just looked at the paperwork. It was worth less than 10,000AUD in 2000 and is now just over 30,000AUD after fees which I would rate as a good investment. There were some ups and downs over that time as with any pension fund but admin fees appear to be less than 80AUD a year. Link to comment Share on other sites More sharing options...
Huggy75 Posted February 24, 2015 Share Posted February 24, 2015 No, you cannot. Mmm... so how come we can do it one way but not the other? Link to comment Share on other sites More sharing options...
Gbye grey sky Posted February 24, 2015 Share Posted February 24, 2015 Mmm... so how come we can do it one way but not the other? I suspect that would require a very long answer and one that I am not sufficiently qualified to give. It would be related though to the specific rules that govern Australian Super. The UK allows it, Australia doesn't. Link to comment Share on other sites More sharing options...
H283 Posted February 24, 2015 Author Share Posted February 24, 2015 I am a citizen. just had a good look though the small print. Looks like the fees are about $5 per month (so, rough maths; $1680 in fees until I retire) I wonder if the fees go up if I stop making contributions? Does this sound reasonable? Just wondering if there was a better option. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted February 24, 2015 Share Posted February 24, 2015 I am a citizen. just had a good look though the small print. Looks like the fees are about $5 per month (so, rough maths; $1680 in fees until I retire) I wonder if the fees go up if I stop making contributions? Does this sound reasonable? Just wondering if there was a better option. That seems very reasonable to me. You don't mention how much is in the fund but even if it is very small then growth in the fund over 28 years should comfortably surpass those fees. Link to comment Share on other sites More sharing options...
Marisawright Posted February 24, 2015 Share Posted February 24, 2015 I am planning to move back to the UK for good in august(ish) My query involves super. I understand I can't take it back with me, but I am worried that the fees will slowly eat away at it until I can withdraw it. Does anyone one know of a super company with no or very low fees who I can transfer it to to minimise the impact of fee on my savings considering I won't be adding to it any more? Remember, the fund will go on earning interest too, which will be more than the fees if they're doing their job properly. This article rates super funds by fees: http://www.superguide.com.au/how-super-works/comparing-super-funds-check-out-the-cheapest-funds Make sure you write to your super fund to cancel all insurances and make sure they do it - that's usually the biggest drain. Link to comment Share on other sites More sharing options...
Guest Posted February 24, 2015 Share Posted February 24, 2015 Also when you go back to the UK make sure you cancel any insurances as if you are not in Aus, the super company will not pay out. This will reduce the fees. I have been advised that Plum are quite good for small balances but you need to do your own due diligence Link to comment Share on other sites More sharing options...
akiralx Posted February 25, 2015 Share Posted February 25, 2015 Mmm... so how come we can do it one way but not the other? Because Australia does not have a universal state pension systrem - you only qualify if you pass an asset and income test. Therefore they do not wish to allow potential recipients of the pension to move assets overseas and so qualify. Link to comment Share on other sites More sharing options...
Tony123 Posted February 7, 2016 Share Posted February 7, 2016 Does anyone know what the process is for transferring my oz super funds to the UK when I go back later this year ? I am 57 this year and eligible to access my super at 55... I have two funds with a value of approx 650 k.. Think of leaving one of the funds here and would try to leave it until I am 60... I believe that would save on tax implications in oz.... Really dont know which way to go ? Would anybody have an idea of what you must do with the fund assets once they are in the UK ? Link to comment Share on other sites More sharing options...
Marisawright Posted February 7, 2016 Share Posted February 7, 2016 Does anyone know what the process is for transferring my oz super funds to the UK when I go back later this year ? I am 57 this year and eligible to access my super at 55... I have two funds with a value of approx 650 k.. Think of leaving one of the funds here and would try to leave it until I am 60... I believe that would save on tax implications in oz.... Really dont know which way to go ? Would anybody have an idea of what you must do with the fund assets once they are in the UK ? All you have to do is tell the super fund that you want to withdraw your balance. Do this well in advance so they will pay it into your Australian bank before you leave. Once the money is in your bank it's just money, there are no rules about what you can and can't do with it. Once you've got set up in the UK you can transfer it to a UK bank account using a service like Moneycorp (if you join through these forums they won't charge you fees,which will save you a packet). If you were already over 60 that would be a no-brainer, no tax to pay and you can do what you like with the money. However because you're 57 you'll have to pay some tax no matter what you do, so you should get advice from an accountant to work out which option will be less painful. As you know, if you withdraw your lump sum now, you'll pay some tax. If you wait till 60 to withdraw your lump sum, you could do that tax-free if you were living in Oz - BUT if you're a UK resident by that time, the UK government might take a HUGE chunk in tax, because it will be income. So you need someone who knows both systems to work out which way will cost you less in tax. There is a third way to consider too - leave the funds in Australia, then convert them to pensions when you need them. You will have to declare those pensions to the UK tax office and they'll be taxed as normal income - but you get a tax-free threshold, same as Oz. Link to comment Share on other sites More sharing options...
Tony123 Posted February 7, 2016 Share Posted February 7, 2016 Wow..... Thank so much for that info... Plenty of options there... I just have to determine the best way.... Thank you again.. Link to comment Share on other sites More sharing options...
scuffythetugboat Posted February 7, 2016 Share Posted February 7, 2016 From what I've read so far, if you are a UK resident for tax purposes and you receive a lump sum from your superannuation (pension) fund then the Inland Revenue regard it as an unauthorised payment which will be taxed at 55%. I am in the process of finding out myself exactly how it will affect myself and I would advise others, especially if you have $600,000 to consider, to find out for themselves. Get professional advice or contact the Inland Revenue yourself is my advice. My plans are on hold until I know exactly where I stand as 55% is an eye watering amount to pay on top of the 15% tax paid putting it in. Link to comment Share on other sites More sharing options...
Tony123 Posted February 7, 2016 Share Posted February 7, 2016 Gulp....... That's not good... I better look into this properly.. Link to comment Share on other sites More sharing options...
Marisawright Posted February 7, 2016 Share Posted February 7, 2016 From what I've read so far, if you are a UK resident for tax purposes and you receive a lump sum from your superannuation (pension) fund then the Inland Revenue regard it as an unauthorised payment which will be taxed at 55%. I am in the process of finding out myself exactly how it will affect myself and I would advise others, especially if you have $600,000 to consider, to find out for themselves. Get professional advice or contact the Inland Revenue yourself is my advice. My plans are on hold until I know exactly where I stand as 55% is an eye watering amount to pay on top of the 15% tax paid putting it in. It's one of the reasons we decided our sojourn in the UK had to be temporary not permanent - no matter what you do, there seems to be a tax hit and our super pot is small enough already. I've had conflicting advice about how much tax we'd pay on the lump sum but eventually we put it in the too-hard basket, frankly! Link to comment Share on other sites More sharing options...
Marisawright Posted February 7, 2016 Share Posted February 7, 2016 Wow..... Thank so much for that info... Plenty of options there... I just have to determine the best way.... Thank you again.. Yes plenty of options there, but all of them will cost you a percentage of your super fund in tax - sometimes a very big percentage. If I were you, I would stay in Australia until you're 60. Then you can withdraw the entire lump sum from both funds tax-free and have them paid into your Australian bank account. Then when you arrive in the UK, you can transfer the whole amount to your UK bank account using Moneycorp - tax-free, because it's just money. You'll save so much money on tax, it will pay for one or two holidays to the UK every year till you're 60. One last thing - if either of your funds is a self-managed super fund, then you'll have no choice - you'll have to close down the fund before you leave Australia, or you'll be taxed by the Australian government as a non-resident - which will cost you 40%. Link to comment Share on other sites More sharing options...
Tony123 Posted February 7, 2016 Share Posted February 7, 2016 Neither of the funds are self managed... I am sure I can't wait until I am 60 to go back but I was going to try to leave the funds in place in oz for as long as I could.... Hoping to last out the remaining years... My plan was to buy a property there and live off what is left over.. Which should be about 70 k pounds... Obviously the tax man would want some of that as well... I really am going to have to look into things properly... Link to comment Share on other sites More sharing options...
Marisawright Posted February 7, 2016 Share Posted February 7, 2016 Neither of the funds are self managed... I am sure I can't wait until I am 60 to go back but I was going to try to leave the funds in place in oz for as long as I could. OK, if you can't wait till you're 60 then you have two choices - either take the lump sums now and resign yourself to paying the Australian tax on that (no British tax payable), OR leave the money in the funds, and convert them to pensions when you are ready. Or maybe you could cash in one, and convert the other. The main thing to understand is that withdrawing the lump sums after you've left Australia isn't an option unless you want to lose a huge chunk of the money in tax, so it's vital to decide what's best BEFORE you leave the country. One other thing - have you asked for a UK pension forecast? You won't get the Australian govt pension, but you will be entitled to a UK one. Once you're resident in the UK you can apply to have your Australian work record up to 2001 recognised, which will increase the pension you can get. You need 30 years' work record to get the full UK pension - if you're still short after claiming your Aussie record, you can pay extra NI contributions to make up the difference. The pension forecast will tell you how much and how to do it. https://www.gov.uk/future-pension-centre Link to comment Share on other sites More sharing options...
Guest Posted February 7, 2016 Share Posted February 7, 2016 I dont know if this helps but my OH lived and worked in Oz in the 90s and gained her citizenship in the process. She has lived in the UK for the past 16 years. She still has her Australian Super and even though it is only a small amount it has grown steadily over the years and has certainly not been eaten up by charges. I hear this repeated often and wonder if it is a myth. Has anyone actually had a Super fund that was eaten up by charges? Now she is planning to return she can benefit from this as she can transfer her UK pension into the Super account but even if that had not happened she could still have taken all the money at 60. Yes, there would have been tax to consider if she had been in the UK but it was money the employer contributed anyway. i've been back over two years and my GESB pension has grown & better than my UK pensions in the same period. I'm not worried at all that two of my pension funds are in Australia - glad I didn't transfer my UK ones though that way my risk is spread. Link to comment Share on other sites More sharing options...
Tony123 Posted February 7, 2016 Share Posted February 7, 2016 Thank you .... Thats good to know... I might just take them both out and pay the Aussie tax on them.... I topped up my UK pension to the 30 years years back so I expect a full pension there....although I think they might have extended it to 35 years . I came to Aussie in 97 so you say I can ask for that time too 2001 to be taken into account ? If not I might top it up.. thanks again for your advice.. Link to comment Share on other sites More sharing options...
Marisawright Posted February 7, 2016 Share Posted February 7, 2016 Thank you .... Thats good to know... I might just take them both out and pay the Aussie tax on them.... I topped up my UK pension to the 30 years years back so I expect a full pension there....although I think they might have extended it to 35 years . I came to Aussie in 97 so you say I can ask for that time too 2001 to be taken into account ? If not I might top it up..thanks again for your advice.. We came to the conclusion that taking the lump sums before leaving was the least painful option - however we didn't do it, because we weren't 100% sure that our move to the UK would be permanent. As it turns out, I'm glad we didn't as I haven't settled here well at all - guess I've just become more of an Aussie than I realise after 30 years! Link to comment Share on other sites More sharing options...
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