r2kev Posted September 4, 2020 Share Posted September 4, 2020 G'Day All, I'm 55 with a chronic ill health condition. I have just been accepted on to getting my full pension from a previous UK employer (on Chronic Ill Health grounds). I have 2 options. 1. A full pension OR 2. A tax free lump sum with a reduced pension. Has anyone received their pension here in Oz from the UK. I think you can't get tax free here. If this was to be the case a large portion of the lump sum would have to be given to the tax man. Consequently Option 1 would be better. Any advice would be greatly appreciated. Cheers, Kev Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted September 4, 2020 Share Posted September 4, 2020 Hi Kev Is there a third option to consider as well which may be a transfer away from this scheme? Given what you have said I feel that this would definitely need to be explored! Regards Andy Quote Link to comment Share on other sites More sharing options...
r2kev Posted September 4, 2020 Author Share Posted September 4, 2020 I would need to get in touch with them for this option. I have no dependants, so I only need to look after myself. My main concern was the 'Tax Free Lump Sum' - If I took this option would I be liable for $$$$ in tax in year 1? Cheers Quote Link to comment Share on other sites More sharing options...
Tulip1 Posted September 4, 2020 Share Posted September 4, 2020 You can probably transfer it out of the final salary pension and have access to all of it which is perhaps what Andrew is thinking. Only the first 25% used would be tax free. The remainder is taxable. That’s possibly the same regarding tax as your lump sum option which is probably 25% of the total pension. 1 Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted September 4, 2020 Share Posted September 4, 2020 (edited) 10 hours ago, r2kev said: I would need to get in touch with them for this option. I have no dependants, so I only need to look after myself. My main concern was the 'Tax Free Lump Sum' - If I took this option would I be liable for $$$$ in tax in year 1? Cheers Hi I'm assuming that you have a defined benefit scheme (that was my thoughts when I mentioned another option), so let's start there. The UK tax free lump sum will be assessed for tax in Australia (assuming your a a permanent resident/citizen here) and this will be based broadly on the growth of the lump sum since arrival into Australia which is then typically taxed at your MTR. The reason as Tulip mentions that I suggested considering another option is that if it is as assumed a defined benefit scheme then a transfer to a defined contribution scheme would give you unlimited access to the pot (with of course taxation considerations) and or the ability to access an enhanced annuity given your health situation. Happy for you to reach out off line if you want to have a chat ( andrew@vistafs.com.au ). Regards Andy Edited September 4, 2020 by Andrew from Vista Financial Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted September 5, 2020 Share Posted September 5, 2020 Hi Kev. I recommend that you consult Andy. Best regards. Quote Link to comment Share on other sites More sharing options...
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