U.P.P. on UK private pensions

[Mike@Bonbeach]

Hi all you senior citizens out there.

We all know that we are eligible for 8% tax allowance against our UK Age pension, but has anyone actually been able to claim a UPP deduction for their private pension?.

We have the forms all filled in (Request for determination of the deductible amount of UPP of a foreign pension or annuity) except for the question 8 where it asks to provide the exact amount of personal contributions made to the Pension fund over the years of employment.

I have been in touch with my pension provider who is having great difficulty in coming up with the information mainly because the company I worked for has changed hands at least twice since I left them and records are hard /impossible to come by. It was 1990 when I retired. All they can come up with is the fact that the scheme was a final salary scheme and records of contributions over 20 years from 1970 to 1990 are lost back in the distant past.

I have tried the ATO who tells me that only the UK Aged Pension is eligible for UPP deductions, yet on the British Pensioners (BAPA) someone on there says they are claiming it for their Teachers Pension.

I have been at this for well over a year now and really haven't progressed very far, and if I am entitled to the deduction then we are losing in the region of$2000 per year in over payment of tax depending on the %age allowed.

My question is "Has anyone been able to claim UPP on their private pension?."

 

Here's hoping to hear some good news.

Mike

[Bridgeman]

Yes, my partner went through the same process and was given a UPP amount to claim for Teacher's Pension. I am also in a state of stalemate and haven't been able to progress my claim any further due to not being able to get the relevant information from my pension fund.

 

However, I do know that there is a cap on the amount that the ATO will allow you to claim as UPP. I was told that the UPP for the state pension would take up most of this and that probably gives rise to the belief that you can only claim a UPP on the state pension. Nevertheless, as I stated above my partner does have a UPP for Teacher's Pension on top of the state pension.

[Alan Collett]

However, I do know that there is a cap on the amount that the ATO will allow you to claim as UPP.

 

=> I'll be interested to see where that is confirmed in legislation or Tax Rulings.

 

Best regards.

[Alan Collett]

Hi all you senior citizens out there.

We all know that we are eligible for 8% tax allowance against our UK Age pension, but has anyone actually been able to claim a UPP deduction for their private pension?.

We have the forms all filled in (Request for determination of the deductible amount of UPP of a foreign pension or annuity) except for the question 8 where it asks to provide the exact amount of personal contributions made to the Pension fund over the years of employment.

I have been in touch with my pension provider who is having great difficulty in coming up with the information mainly because the company I worked for has changed hands at least twice since I left them and records are hard /impossible to come by. It was 1990 when I retired. All they can come up with is the fact that the scheme was a final salary scheme and records of contributions over 20 years from 1970 to 1990 are lost back in the distant past.

I have tried the ATO who tells me that only the UK Aged Pension is eligible for UPP deductions, yet on the British Pensioners (BAPA) someone on there says they are claiming it for their Teachers Pension.

I have been at this for well over a year now and really haven't progressed very far, and if I am entitled to the deduction then we are losing in the region of$2000 per year in over payment of tax depending on the %age allowed.

My question is "Has anyone been able to claim UPP on their private pension?."

 

Here's hoping to hear some good news.

Mike

 

 

Hi Mike.

 

If yours is a final salary scheme I anticipate you may not have made any personal contributions, with your employer/s funding the scheme?

 

Best regards.

[Bridgeman]

However, I do know that there is a cap on the amount that the ATO will allow you to claim as UPP.

 

=> I'll be interested to see where that is confirmed in legislation or Tax Rulings.

 

Best regards.

 

This is from the first page of the application form:

 

 

[TABLE=width: 349]

[TR]

[TD] You are able to claim 8% of your annual pension income (expressed in Australian dollars) as your deductible amount if you:

n

receive a category A or B United Kingdom State (UK State) pension (previously known as British National Insurance Scheme pension),and

n

it is paid from The Pension Service.

This method generally results in the maximum deduction

you are entitled to. If you think your deductible amount will be greater than the amount calculated using the above percentage, you will need to complete this form. [/TD]

[/TR]

[/TABLE]

Edited November 9, 2016 by Bridgeman

[Alan Collett]

This is from the first page of the application form:

 

 

[TABLE=width: 349]

[TR]

[TD] You are able to claim 8% of your annual pension income (expressed in Australian dollars) as your deductible amount if you:

n

receive a category A or B United Kingdom State (UK State) pension (previously known as British National Insurance Scheme pension),and

n

it is paid from The Pension Service.

This method generally results in the maximum deduction

you are entitled to. If you think your deductible amount will be greater than the amount calculated using the above percentage, you will need to complete this form. [/TD]

[/TR]

[/TABLE]

 

 

 

The 8% pertains to the UPP you can claim for the State Pension. And you can claim more than this if you can make a case.

 

It doesn't pertain to the UPP you can claim on other pension income.

 

Best regards.

Edited November 9, 2016 by Alan Collett

[Mike@Bonbeach]

Hi Mike.

 

If yours is a final salary scheme I anticipate you may not have made any personal contributions, with your employer/s funding the scheme?

 

Best regards.

 

Thank you Alan for the response, but all employees in the scheme I was in had to contribute. For 18 years it was 5% of my salary and then reduced to 3% for the final 2 years, so all in all quite a sizeable contribution, and I believe it was taken out of my salary after tax. The employer then matched or even exceeded my contribution.

The last contact I had with the ATO (yesterday) the person at the other end of the phone suggested that I fill out the form as complete as possible, and send it off with a covering letter explaining the difficulty in obtaining the figures the ATO want, so I will give that a go.

I even tried to get a face to face interview with someone in the local ATO but that was declined.

Mike

[Alan Collett]

Thank you Alan for the response, but all employees in the scheme I was in had to contribute. For 18 years it was 5% of my salary and then reduced to 3% for the final 2 years, so all in all quite a sizeable contribution, and I believe it was taken out of my salary after tax. The employer then matched or even exceeded my contribution.

The last contact I had with the ATO (yesterday) the person at the other end of the phone suggested that I fill out the form as complete as possible, and send it off with a covering letter explaining the difficulty in obtaining the figures the ATO want, so I will give that a go.

I even tried to get a face to face interview with someone in the local ATO but that was declined.

Mike

 

 

Hi Mike.

 

If paid from your after tax salary, I agree - you should be able to obtain a deduction for the UPP of your pension contributions.

 

Do you have your gross salary details for the years in question?

 

If so, it may be possible to undertake an exercise to compute the estimated amounts.

 

HM Revenue might have your gross salary details on file going back a number of years?

 

Best regards.

[datstheone]

I obtained a private ruling regarding U.P.P. on my private pension from Universities Superannuation Scheme in July and got a deduction on my tax for 2015-16

 

I filled in the UPP form (https://www.ato.gov.au/uploadedFiles...43_01_2015.pdf) and sent it off. I didn't use an accountant as the ones I spoke to were ok with applying a U.P.P. deduction but not making a claim to get one.

 

In order to get the ruling I needed to have details of my payments into my pension scheme. My pension company supplied me with the details of all my annual contributions which need to be added up to give the total for the form. There doesn't seem to be any allowance for inflation, just a sum of the actual contributions.

 

I also needed the value of the pension at the time I retired. This is something called Cash Equivalent Transfer Value, CETV. Again I had to get this from my pension company, but as I have already retired they needed to get this calculated and charged a fee for this. So just about break even on the cost of this and the tax savings for this year, but as a one off no future fees.

 

As I get the whole pension and no residual capital value the UPP is simply what I paid in divided by my wife's life expectancy at the time I retired (ATO use youngest spouse for this, in this case her). Also things are simplified by the fact that I spent my entire working life in UK University sector so have a single private pension. I guess that if someone has multiple private pensions they will need a UPP ruling on each pension.

 

UPP is a fixed sum based on values at time of retirement, so it will not change over the years as pension goes up. It is quoted in GBP so actual allowance will depend on ATO exchange rate for any given tax year. For this year it comes out as just over 5% of pension being tax free so on my estimates I am saving around $1000 on my total tax bill.

 

Although the ruling was requested and given for the 2015-16 tax year there is a note that says that if nothing changes in the information given it can apply for more than just that tax year.

 

Other than having to sort out a minor error in my adding up of all my contributions the process was quite painless. However, I was fortunate to just have one pension provider who understood the information that was required by ATO and were willing to provide it, albeit requiring a fee for CETV calculation due to my already drawing my pension.

 

As I only turned 65 in June I did not receive any UK state pension until after the end of the tax year so haven't put claiming the 8% allowance on that, but there nothing in private pension ruling about a limit on total UPP deductions that can be claimed for multiple pensions.

 

Hope this helps and that you can get the information that ATO need to do the calculations and grant you a private ruling.

[Mike@Bonbeach]

Thank you both Alan and datstheone.

Unfortunately I didn't keep records of my salary levels beyond about 5 years, ditching anything older than that, and of course once I retired(1990) I kept to the same time frame so virtually all my salary records except the final year were ditched. Had no idea that they would be needed 25 years later!!!.

If the pension fund isn't able to help then maybe Alan's idea of the Inland Revenue may be the way to go, but would they keep anything going back 45 years, it was probably all paper records then.

Thanks for your inputs Guys, much appreciated. Gives me some hope anyway.

Mike

[Bridgeman]

Aah, thanks for clarifying Alan. It was a bit unclear.

[nickinmk]

Could anyone assist me with a simple worked example? I am an Australian living in the UK, who hopes to retire in late 2017, at age 55. I work for a company with a Final Salary Pension scheme, and will either receive that, or take its CETV. I know my contributions to date, and I will be taking the maximum tax free lump sum. Any help gratefully received!

[Fisher1]

Hi Mike.

 

If paid from your after tax salary, I agree - you should be able to obtain a deduction for the UPP of your pension contributions.

 

Do you have your gross salary details for the years in question?

 

If so, it may be possible to undertake an exercise to compute the estimated amounts.

 

HM Revenue might have your gross salary details on file going back a number of years?

 

Best regards.

 

 

 

When I retired I had a problem that could have been solved by accessing my tax records from ten years earlier (don't ask :-) ) and I spoke to someone from the inland revenue at that time (2009) who said they only keep records for six years.

[Fisher1]

Yes, my partner went through the same process and was given a UPP amount to claim for Teacher's Pension. I am also in a state of stalemate and haven't been able to progress my claim any further due to not being able to get the relevant information from my pension fund.

 

However, I do know that there is a cap on the amount that the ATO will allow you to claim as UPP. I was told that the UPP for the state pension would take up most of this and that probably gives rise to the belief that you can only claim a UPP on the state pension. Nevertheless, as I stated above my partner does have a UPP for Teacher's Pension on top of the state pension.

 

 

hi Bridgeman, I note your partner claims UPP on her teachers' pension. I am a retired teacher hoping to move to Australia next year, and so this is of great interest to me! Do you mind me asking whethe she contacted the education department in London or went straight to the pension provider, Capita, for this information? Many thanks.

[datstheone]

Could anyone assist me with a simple worked example? I am an Australian living in the UK, who hopes to retire in late 2017, at age 55. I work for a company with a Final Salary Pension scheme, and will either receive that, or take its CETV. I know my contributions to date, and I will be taking the maximum tax free lump sum. Any help gratefully received!

 

Not sure what you mean by worked example.

 

As far as I am aware you will only need to get a UPP ruling if you opt to receive your final salary based pension, and if you are liable for Australian income tax.

 

You just need to fill in https://www.ato.gov.au/uploadedFiles...43_01_2015.pdf which will require, with evidence from pension provider, and in relevant local currency e.g. GBP.

 

- contributions to scheme

- lump sum taken on retirement

- CETV on day before lump sum taken

- first year's pension amount

 

ATO also want to know if part of the pension will continue to be paid to any partner should they survive you.

 

Post form off to ATO and you should get ruling in a month or two. Mine took a bit longer as I made an error adding up the annual contributions supplied by pension provider, so needed to confirm that ATO maths was better than mine!

 

For a typical UK final salary pension I think that everything is sorted at retirement and that is the only time to take any cash out of the scheme other than the on-going pension, and that this is all paid to you. This means that calculating the UPP allowance is a case of dividing your contributions by the your or your partner's (if they get continuing pension) life expectancy at the time of retirement - ATO works this out from dates of birth supplied on form.

 

This is supplied as a local currency value, e.g. GBP which is converted to AUD using ATO exchange rate for the tax year in question and that value used as an allowance against income.

 

In my case my total contributions were around £40000 and my wife's life expectancy was longer than mine at 30 years when I retired in 2010, so my UPP was 40000/30 which is around £1333. So for 2015-16 I was able to reduce my taxable income by $2605, saving just over what I spent getting my pension provider to retrospectively calculate my retirement CETV.

 

If nothing changes then ruling can be used for subsequent years, converting £1333 into AUD each time. So I will then get full benefit as don't have to offset against costs of getting the CETV.

 

If you move back to Australia after retiring and don't become an Australian tax resident until after retirement I don't think lump sum will be liable for tax in Australia. I married and moved to Australia with my Australian wife after retirement so that was just part of my existing assets.

 

I hope this helps.

[Bridgeman]

hi Bridgeman, I note your partner claims UPP on her teachers' pension. I am a retired teacher hoping to move to Australia next year, and so this is of great interest to me! Do you mind me asking whethe she contacted the education department in London or went straight to the pension provider, Capita, for this information? Many thanks.

 

Hi Fisher1, my partner contacted the pension provider Teacher's Pension for the information.

[Fisher1]

Hi Fisher1, my partner contacted the pension provider Teacher's Pension for the information.

 

Thanks!

[nickinmk]

DATSTHEONE

 

I hope this helps.

Yes it does, many thanks!

[Currumbin Keith]

Hi Mike  - did you ever have any luck with your UPP covering letter gambit to the ATO ? I'd like to try for a UPP deduction on my new UK Occ Pension - but judging by their recent performance, I'm not optimistic about getting any useful info from the scheme administrators.   Kind regards - Keith Bannerman, Currumbin Valley, Gold Coast,  Queensland

[Mike@Bonbeach]

Hi Keith.

In the end I didn't bother, put it in the "too hard too keep at it" basket.

I was becoming very frustrated and my pension provider in the end didn't seem to be bothered after many delays. I think it was too hard for them to do too.

We felt comfortable and secure with our income and the hassle just wasn't worth the trouble of constant emails and excuses. It also coincided with us becoming Aussie pensioners so that made things a lot easier.

Mike 

[Fisher1]

5 hours ago, Mike@Bonbeach said:

Hi Keith.

In the end I didn't bother, put it in the "too hard too keep at it" basket.

I was becoming very frustrated and my pension provider in the end didn't seem to be bothered after many delays. I think it was too hard for them to do too.

We felt comfortable and secure with our income and the hassle just wasn't worth the trouble of constant emails and excuses. It also coincided with us becoming Aussie pensioners so that made things a lot easier.

Mike 

Interesting. I contacted teachers pensions ages ago and they said they werent able to calcate my contribution ...

[Currumbin Keith]

Somewhat to my surprise, the scheme administrators have almost immediately supplied the information I requested. So I will send in the form and try my luck with the ATO for a UPP deduction on my new UK Occ Pension. BTW, apparently the exact amount of personal contributions I made to this pension fund 1975--1987 was £4,540.22 - who could ever remember that sort of detail ?

[Currumbin Keith]

UPP update - I posted off the ATO form on 3rd Dec 2018. Today they called to to be sure I wasn't muddling my UK State Pension with my Occ Pension - apparently it is a very complex calculation ... I believe them ! Then they gave me a UPP deductible amount of  £153 [ $253.44 ] for the 2017-18 financial year.  And they said if there is no variation, the ruling can apply for future years. This UPP  is quite a small percentage of my Occupational Pension - far less than the 8% on UK State Pensions, but its better than nothing and was achieved with relatively little effort. 

[Fisher1]

On ‎10‎/‎11‎/‎2016 at 09:21, Mike@Bonbeach said:

Thank you both Alan and datstheone.

Unfortunately I didn't keep records of my salary levels beyond about 5 years, ditching anything older than that, and of course once I retired(1990) I kept to the same time frame so virtually all my salary records except the final year were ditched. Had no idea that they would be needed 25 years later!!!.

If the pension fund isn't able to help then maybe Alan's idea of the Inland Revenue may be the way to go, but would they keep anything going back 45 years, it was probably all paper records then.

Thanks for your inputs Guys, much appreciated. Gives me some hope anyway.

Mike

Hi Mike

Inland revenue only keep records for six years - I know because I had a difficulty with my last employer demanding tax records going back fifteen years (long story, not relevant).  However, as a former colleague pointed out to me this week, the social security do keep records for longer than that. It seems a bit convoluted but, if we (I'm trying to get a UPP for my teachers' pension) were to find out from social security the yearly amount contributed, both as a monetary figure and as a percentage of salary, then we would be able to calculate our total salary for each year. Then, given knowledge of the percentage paid into the pension scheme (6% p.a. in my case) it would be possible to calculate the total amount paid for each year. Sounds like a long shot, but worth a try contacting social security?    I have also written to my union to see if they can help.

[peterxyz]

On 22/12/2018 at 22:22, Fisher1 said:

Hi Mike

Inland revenue only keep records for six years - I know because I had a difficulty with my last employer demanding tax records going back fifteen years (long story, not relevant).  However, as a former colleague pointed out to me this week, the social security do keep records for longer than that. It seems a bit convoluted but, if we (I'm trying to get a UPP for my teachers' pension) were to find out from social security the yearly amount contributed, both as a monetary figure and as a percentage of salary, then we would be able to calculate our total salary for each year. Then, given knowledge of the percentage paid into the pension scheme (6% p.a. in my case) it would be possible to calculate the total amount paid for each year. Sounds like a long shot, but worth a try contacting social security?    I have also written to my union to see if they can help.

Maybe request your National Insurance Contribution history - there's a fairly standard process, though when I did it it took a couple of months to arrive

https://www.gov.uk/check-national-insurance-record