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r2kev

Final Salary Pension from UK

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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

 

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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

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Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

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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 

 

 

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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. 

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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 by Andrew from Vista Financial

Financial Adviser (FPA Member AFP ®) Specialising in UK Expat Advice and Pension Transfers / AR-322874 /AFSL-234951

SMSF Accredited Adviser / UK SIPP Authorised Adviser 

Director  - Vista Financial Services – www.vistafs.com.au 08 8381 7177

 

Please note that my advice is general advice only and professional financial advice should be sought for your own personal situation.

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Hi Kev.

I recommend that you consult Andy.

Best regards.


Managing Director, Go Matilda Visas - www.gomatilda.com

Registered Migration Agent Number 0102534; Registered Tax Agent (Australia)

Chartered Accountant (UK, and Australia)

T - 023 81 66 11 55 (UK) or 03 9935 2929 (Australia)

E - alan.collett@gomatilda.com and acollett@bdhtax.com

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