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

[Skippy2017]

Yes, I believe it's $300k in yr 1 then $100k/yr from yr 4

[Skippy2017]

12 minutes ago, Gbye grey sky said:

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. 

That's good to hear.   So far you are happy with IVCM and the AESF?

[be_christopher]

Has anyone taken the 25% tax free amount before transferring to Australia? It's not clear to me if the tax free status from the UK is preserved in Australia. 

[be_christopher]

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Edited September 6, 2019 by be_christopher
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[be_christopher]

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[be_christopher]

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[be_christopher]

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[Skippy2017]

3 minutes ago, be_christopher said:

Has anyone taken the 25% tax free amount before transferring to Australia? It's not clear to me if the tax free status from the UK is preserved in Australia. 

I was planning to do that but the timing is important.  You can do that by making sure you take it whilst tax resident in the UK.  There is no such benefit for this in Australia so you can't do it once resident there.

[be_christopher]

OK. Thanks. To add to the complication I am tax resident in the USA. There is some international treaty law that suggests that it's tax free in the USA as well, though it's not definitive. 

[Skippy2017]

USA: That certainly adds an extra level of complexity!   

The planned process for me was for the first payment I would move (roughly) £200k to drawdown whilst tax-resident in the UK - and take the 25% tax -free (£50k).   Then migrate to Australia, then (within 6 months) move the remaining £150k that's in that drawdown state to the Aus QROPS. (£150k = $300k for simple sums).   After 3 yrs move another $300k (but not going through the drawdown step again because I wouldn't want to take the 25% whilst resident in Australia for tax).

 

[be_christopher]

We have the same plan.

I will get tax advice here in the USA and if that's ok then:

1) Transfer to a SIPP.  2) Take the 25%. 3) Back home to Aus. 4) $AUS 300k transfer.  5) The rest over a few years. 

[Gbye grey sky]

1 hour ago, Skippy2017 said:

That's good to hear.   So far you are happy with IVCM and the AESF?

It is too early yet for me to feel confident to recommend them to be honest.

I applied last year and, just as I had completed everything the fund was suspended by HMRC pending some sort of investigation and enquiry which dragged on for 9 months before being resolved.  I was never told anything about the issue.

I then had to make a decision whether to restart the process which I did and the transfer was completed in July.  If you are not proceeding until next year by all means check back with me on this thread and I might be able to provide more reassurance.

This still remains the only retail fund so it is this or an SMSF for now.

[Skippy2017]

5 minutes ago, Gbye grey sky said:

It is too early yet for me to feel confident to recommend them to be honest.

I applied last year and, just as I had completed everything the fund was suspended by HMRC pending some sort of investigation and enquiry which dragged on for 9 months before being resolved.  I was never told anything about the issue.

I then had to make a decision whether to restart the process which I did and the transfer was completed in July.  If you are not proceeding until next year by all means check back with me on this thread and I might be able to provide more reassurance.

This still remains the only retail fund so it is this or an SMSF for now.

Thanks.  I hope it works out well for you.

[sunnysomerset01]

OUt of interest, what were the charges like to transfer your SIPP to AESF using IVCM? 

[misskat0]

Bumping this thread aboue AESF, as am shortly to try to claim the 25% lump sum from the UK and transfer the remainder to this scheme (on the presumption it's still the sole contender). Any experiences to share about the process?

[Skippy2017]

I've spent a lot of time studying these transfers recently. It's complicated.

How much would you be transferring after taking the 25% tax free?   If £150k or less you should be OK.

If over £150k (rough conversion of the NCC cap limit of AUD $300k) for the first tranche check whether the part to be transferred from the UK SIPP is sufficiently-separate from the remainder of the UK pension.  There's a rule that says that to be an authorised transfer it must be from an "arrangement under which no other sums or assets are held".   It's not clear to me which UK SIPPs have drawdown arrangements that are sufficiently-separate from the remainder of the pension in the SIPP (not in drawdown).

To be confident that each transfer is separate enough you can open up multiple SIPPs.  For me it's a shame to have to do this because after taking advice over the years I have consolidated separate SIPPs into one because I was told that would make the transfer easier.   Now the advice I'm getting is to split them out again

I've looked  a lot at the AESF and IVCM. Watch the ongoing fees which seem high to me.  It might be that for smaller pension pots the AESF is appropriate  but for larger pots a SMSF becomes better value despite the extra costs involved in running it.

It would be great for another retail scheme to come along and create a bit of competition for AESF so that their ongoing fees came under a bit of pressure.

[TheFinanceGuy]

As others have pointed out, the 25% 'tax free' lump sum is only for those that are UK residents. Although there is a double taxation treaty between the two jurisdictions, this does not cover lump sums.  That being said, there is a specific way to release a portion of this tax-free element upon a transfer to Australia. 

The 25% lump sum will crystallise the pension and as such, you will not be able to make partial transfers from the fund. There are SIPPs out there that can effectively be split to make a transfer above the $300,000 threshold possible. It is also important to know that there is tax on transfer to Australia. This is on the assessable fund earnings from an individuals Date of Arrival to Australia, to when the funds are transferred over. This does not count towards the $300,000 cap. 

As per the above, given AESF are the only retail QROPS provider, I would assume there is no motivation to reduce ongoing fees.  An SMSF should be considered in certain circumstance. 

[TheBravefinch30011964]

On 06/09/2019 at 19:28, Gbye grey sky said:

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. 

 

On 06/09/2019 at 19:28, Gbye grey sky said:

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. 

 

On 06/09/2019 at 01:54, 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.

Have you been happy with ICVM and the performance of the AESF? I am looking at doing the same thing, but seems it is such a minefield to navigate and people wanting you to set up a SMSF are disparaging about AESF!