New 55+ Retail QROPS Super (soon) - UK Pension Transfers

[Andrew from Vista Financial]

Hello

Just an update about a new Retail Super Fund hoping to have QROPS status by mid February.

I cannot give specifics at this time but the company are a well established Australian Superannuation company (they have a UK parent company) and they have their new 55+ Super Fund application currently with APRA, once this is signed off they will apply to HMRC for a QROPS certificate (they have already had HMRC look at the Deed and HMRC seem happy with it).

So whilst the only current avenue for a QROPS transfer is again the SMSF path for those in the midst of looking at transferring it may pay to hold fire.

Regards

Andy 

[Aussiebird]

Hello Andrew,

I currently work for the NHS and are moving back to Australia in the very near future.

Is it correct that I will not be able to transfer my pension to Australia ? And what would I do or how do I get my UK state pension when living in Australia?

Many thanks.

 

 

 

[Andrew from Vista Financial]

Hello

Sorry for the delay, it's my first day in the office back the since Christmas break.

You are right in saying that you will not be able to conduct a pension transfer with your NHS pension to an Australian Super Fund (this is a UK rule).

Regards your UK State Pension you will be able to make a claim for your benefits at your relevant State Pension Age and it can be paid to either a UK or Australian bank account (note also that if you do not have full entitlements you may be able to buy additional years along the way (before claim)).

Hope this helps, Andy

[Gbye grey sky]

Hello Andrew

Is there any update on this fund?

I am aware that Tidswell remains suspended from accepting transfers since HMRC pulled the curtain down on it last August so there remains concerns about the ongoing status of such funds.

I am 59 this year so have been holding fire for almost 4 years now.  Still not persuaded personally by the SMSF model but equally do not want to leave my pension pot in the UK.

Thanks

David

[Andrew from Vista Financial]

Hi David

Unfortunately not, they have informed me that it is taking longer at the Australian end (APRA) than expected so a bit difficult to formulate a view around a date.

I have also been informed by AESF that they have resolved all issues with HMRC and hope to be back on line soon.

Hope this helps.

Regards

Andy 

[Paul1Perth]

On Monday, December 31, 2018 at 18:10, Aussiebird said:

Hello Andrew,

I currently work for the NHS and are moving back to Australia in the very near future.

Is it correct that I will not be able to transfer my pension to Australia ? And what would I do or how do I get my UK state pension when living in Australia?

Many thanks.

 

 

 

My wife recently started getting her NHS pension. She took a lump sum and a monthly payment. I think she just applied on-line. She is 60 and still working part time here.

[rammygirl]

You can still get you UK pension without transferring. Do be aware of the tax implications in Australia though. 

[Andrew from Vista Financial]

Watch this space folks...…...should be some news early next week!!

[Andrew from Vista Financial]

Well the 'Australian Expatriate Super Fund' have undergone their HMRC review and have been added back to the ROPS list.

A couple of weeks late but better late than never as the saying goes:

https://www.gov.uk/guidance/check-the-recognised-overseas-pension-schemes-notification-list#australia

Tidswell Master Superannuation Plan

Added

[Andrew from Vista Financial]

Just to add that we do specialise in this area (UK Expat Advice), so if anyone does require advice around their UK Pensions and Retirement Planning this is what we do on a daily basis.

We have been working with UK expats in this space for over a decade now and still have an ongoing relationship with many clients (as their Advisers) whom we assisted over a decade ago. 

We have the ability to advise on and recommend QROPS in Australia, be that the above Retail Super or an SMSF (where a transfer to Australia is appropriate).

We also have the ability to advise on and recommend (which is quite rare for Australian Advisers) an International SIPP in circumstances where an individual is less than age 55 or even above age 55 but with a balance of more than the Australian Contribution Caps (which could then limit how much can be transferred to Australia in one hit).

This solution can then allow us to become your Australian Regulated Investment Advisers on your UK Pension monies with gives the added advantage of having the option of investing that money in UK Pounds or Australian Dollars.

Feel free to contact us if you wish to discuss further.

Andy

 

 

 

[akiralx]

On 07/01/2019 at 10:52, Andrew from Vista Financial said:

Hello

Sorry for the delay, it's my first day in the office back the since Christmas break.

You are right in saying that you will not be able to conduct a pension transfer with your NHS pension to an Australian Super Fund (this is a UK rule).

Hi, Andrew - is this because the NHS is a public sector fund? I have a deferred benefit with the Local Government scheme (LGPS), and while I was not thinking of transferring it, it would be good to know if it is possible.

Thanks

[Marisawright]

1 hour ago, akiralx said:

Hi, Andrew - is this because the NHS is a public sector fund? I have a deferred benefit with the Local Government scheme (LGPS), and while I was not thinking of transferring it, it would be good to know if it is possible.

Thanks

Do you mean defined benefit? That means you are guaranteed a fixed amount per month until you die, right? I’m not sure how you could transfer that to the Australian superannuation system, which just gives you a pot of money and it’s up to you to make it last

[NicF]

15 hours ago, Marisawright said:

Do you mean defined benefit? That means you are guaranteed a fixed amount per month until you die, right? I’m not sure how you could transfer that to the Australian superannuation system, which just gives you a pot of money and it’s up to you to make it last

It's perfectly possible to transfer a defined benefit pension - you obtain a valuation of the fund and get to transfer that much to your new fund.  My OH, who is over 55 with a final salary pension scheme in the UK has been considering doing this for years.  Whether it's a good idea to transfer out of a defined benefit type pension is another matter altogether.

[Andrew from Vista Financial]

17 hours ago, akiralx said:

Hi, Andrew - is this because the NHS is a public sector fund? I have a deferred benefit with the Local Government scheme (LGPS), and while I was not thinking of transferring it, it would be good to know if it is possible.

Thanks

Yes in this case because it is a government un-funded defined benefit scheme.

Other types of defined benefits schemes can be transferred however IF they are transferred to Australia then they will effectively lose their defined benefit status and instead become an accumulation style Superannuation (known as defined contribution or money purchase pensions in the UK).

It's a bit like taking a pot of money and buying a lifetime annuity in reverse, you are losing that (deferred) lifetime income stream and instead have a pot of money to invest for retirement and to draw down on in retirement. That said it is still possible to purchase a lifetime annuity type product in Australia with Superannuation (accumulation) money at retirement.

Hope this helps

Andy

[akiralx]

Yes, it is a defined benefit, deferred since 2009. Though the LGPS is funded unlike some of them? 

I would of course be giving up the DB lump sum and lifetime pension - but I am concerned that both will be taxed when paid from the UK while if transferred as  a cash equivalent into super here they wouldn't be when I take the benefit.  I could actually take the LGPS benefit (reduced) in 2 years at age 55.

Thanks

[be_christopher]

Hi Andrew,

Thanks for this site. I'd appreciate some general advice: 

I am 59 and have $AUS 670,000 in a UK defined contributions pension. I am returning to Australia to live in February next year. I intend to  create a QROPS compliant fund and transfer money to this account. Will I have to pay Australian tax of 45% of 370,000 (670,000-300,000)  = $AUS 160,000 ? 

"The maximum UK pension balance you can transfer using the Australian superannuation non-concessional contributions bring-forward rule is $300,000, based on figures for the 2018-19 financial year."

[Marisawright]

1 hour ago, be_christopher said:

Hi Andrew,

Thanks for this site. I'd appreciate some general advice: 

I am 59 and have $AUS 670,000 in a UK defined contributions pension. I am returning to Australia to live in February next year. I intend to  create a QROPS compliant fund and transfer money to this account. Will I have to pay Australian tax of 45% of 370,000 (670,000-300,000)  = $AUS 160,000 ? 

"The maximum UK pension balance you can transfer using the Australian superannuation non-concessional contributions bring-forward rule is $300,000, based on figures for the 2018-19 financial year."

I think you'd be best to have a consultation with Andrew to work out whether your plan is a good one. If you are going to lose such a huge amount in tax, why would you not leave your UK pension where it is?  Lots of people are paid their UK pension in retirement in Australia.

[be_christopher]

Thanks for the comment,. Leaving it in the UK is an option though I'd like to take advantage of the 6 month tax window and keep all my pension arrangements as simple as possible. 

I don't know my tax calculation is correct. A 45% tax on any amount over $AUS 300,000 seems prohibitive. 

 

"Jun 10, 2019 - If you transfer your UK pension to an Australian one within six months of moving to Australia, then you can do so without any tax implications. If, however, you don't make the transfer until after that period, the amount you transfer will be subject to a 15% tax, according to the Australian Tax Office, or ATO."

 

[Andrew from Vista Financial]

2 hours ago, be_christopher said:

2 hours ago, be_christopher said:

 

I don't know my tax calculation is correct. A 45% tax on any amount over $AUS 300,000 seems prohibitive. 

 

"Jun 10, 2019 - If you transfer your UK pension to an Australian one within six months of moving to Australia, then you can do so without any tax implications. If, however, you don't make the transfer until after that period, the amount you transfer will be subject to a 15% tax, according to the Australian Tax Office, or ATO."

 

 

 

Hello

These two statements aren't quite correct there is quite a bit more too it than this and so to provide advice to you on a transfer plan as Marisa mentions would require us to consult with you in detail.

Some general info though, the bring forward rule allows up to $300,000 to be contributed in a 3 year period and after that the $300,000 amount starts again (if under age 65).

After six months tax is not payable on the whole transfer amount only the applicable fund earnings (growth amount) and yes there may be an opportunity to pay the tax on the growth at a concessional rate of 15%.

You also mention you intend to create a QROPS do you mean via a Self-Managed Super Fund?

These vehicles do very much have a place in Australia and setting one up for purposes of creating a QROPS could be a driver however there is certainly a lot to them and they should not be set up without fully understanding what is takes to run one and what involvement there will be by a person as a Trustee on an ongoing basis.

The alternative for UK pension transfers to a SMSF is the retail QROPS as mentioned in this post however there are going to be of course pros and cons for each solution based on an individuals personal circumstances. 

Happy to discuss in more detail when you get to Oz :)

 

Regards

Andy

 

[Skippy2017]

18 hours ago, be_christopher said:

Thanks for the comment,. Leaving it in the UK is an option though I'd like to take advantage of the 6 month tax window and keep all my pension arrangements as simple as possible. 

I don't know my tax calculation is correct. A 45% tax on any amount over $AUS 300,000 seems prohibitive. 

 

"Jun 10, 2019 - If you transfer your UK pension to an Australian one within six months of moving to Australia, then you can do so without any tax implications. If, however, you don't make the transfer until after that period, the amount you transfer will be subject to a 15% tax, according to the Australian Tax Office, or ATO."

 

I am in a fairly similar position.  I'm in the UK now and planning to return to Australia in Sep 2020.   My plan (provisionally) is to transfer $300k the first year, then $100k each year after that from my UK SIPP to an Australian QROPS.  I'm actually looking at the IVCM retail QROPS (AESF) which seems to meet my requirements.   If I end up leaving a part of my pension in a UK SIPP because I run out of time to transfer it all, so be it.   The tax on pension payments of what remains in the UK will be relatively small (assuming it will then be my only income) . (I'd compare that tax against the tax on the contribution into the Australian QROPS in later years to determine whether future transfers were appropriate).   My UK SIPP provider has confirmed ways to extract chunks from the SIPP to support this long process.

Interested to hear from anyone who has used IVCM (AESF) to hear of their experiences.

[be_christopher]

That may be a good approach Skippy2017. Bring over the $300,000 into a QROPS account and then transfer the rest over gradually. Though need to be sure there isn't a 15% transfer tax on the $100,000 in later years.

IVCM looks pretty good and may be easier than creating your own QROPS compliant SMSF. 

https://ivcm.com/products/aesf/

Has anyone done a SIPP transfer to Australia ?

[Skippy2017]

Yes I have been waiting for an Australian retail QROPS for a long time.  Without that I might have gone for a SMSF but I don't fancy all the admin and responsibilities...

As for the tax on the future contributions.  As far as I understand it you will only be paying tax on the gain since you arrived back in Australia.   Hence it depends on the performance...   I'm not worried about this tax too much.   I'm not expecting growth to exceed 5% per year in my UK SIPP. 

[be_christopher]

OK. I may be a few months ahead of you, arriving back in Aus in Feb.

I've sent an inquiry about transferring to a SIPP. I will post know how it all goes.

[Gbye grey sky]

17 hours ago, Skippy2017 said:

I am in a fairly similar position.  I'm in the UK now and planning to return to Australia in Sep 2020.   My plan (provisionally) is to transfer $300k the first year, then $100k each year after that from my UK SIPP to an Australian QROPS.  I'm actually looking at the IVCM retail QROPS (AESF) which seems to meet my requirements.   If I end up leaving a part of my pension in a UK SIPP because I run out of time to transfer it all, so be it.   The tax on pension payments of what remains in the UK will be relatively small (assuming it will then be my only income) . (I'd compare that tax against the tax on the contribution into the Australian QROPS in later years to determine whether future transfers were appropriate).   My UK SIPP provider has confirmed ways to extract chunks from the SIPP to support this long process.

Interested to hear from anyone who has used IVCM (AESF) to hear of their experiences.

I have transferred my pension to the AESF using IVCM. It was more straightforward for me because my funds were valued at under $300,000 at the time I emigrated.

It is good that your UK SiPP provider is working with you because my wife’s provider wouldn’t so we ended up leaving her pension in the UK. 

[Gbye grey sky]

17 hours ago, Skippy2017 said:

I am in a fairly similar position.  I'm in the UK now and planning to return to Australia in Sep 2020.   My plan (provisionally) is to transfer $300k the first year, then $100k each year after that from my UK SIPP to an Australian QROPS.  I'm actually looking at the IVCM retail QROPS (AESF) which seems to meet my requirements.   If I end up leaving a part of my pension in a UK SIPP because I run out of time to transfer it all, so be it.   The tax on pension payments of what remains in the UK will be relatively small (assuming it will then be my only income) . (I'd compare that tax against the tax on the contribution into the Australian QROPS in later years to determine whether future transfers were appropriate).   My UK SIPP provider has confirmed ways to extract chunks from the SIPP to support this long process.

Interested to hear from anyone who has used IVCM (AESF) to hear of their experiences.

My understanding is that the $300k limit doesn’t use up past years but forward ones so you would have to wait 2-3 years before moving the next 100k assuming limits didn’t change.

Better check that.