UK Pension Transfer to OZ SMSF via TorFX

[jldathome 3]

Hi All

Has anyone used TorFX (an FX transfer agent) to move GBP from their UK pension provider to an Australian bank account?

My UK pension provider (Hargreaves Lansdown) has refused to release my funds to TorFX citing the fact that the money is going into an account called 'TorFX Pty Ltd' (with a reference to my funds account number with TorFX) rather than to an account directly in the name of my fund.

TorFX assure me that they do this all the time. Hargreaves Lansdson warn me that HMRC could hit me with a 75% penalty on my fund!

TorFX have re-issued their settlement instructions that note the name of my fund rather than the account number, but so far no progress from Hargreaves.

Thanks in advance.

 

[Andrew from Vista Financial 638]

Hi

Yes this can be an issue, effectively the account that the UK Pneion Provider needs to send the money too needs to be in the name of the (QROPS) SMSF Trustees.

You may need to consider opening a foeign currency account in the name of the SMSF in the first instance for Hargreaves to transfer into.

Regards Andy

[jldathome 3]

Thanks Andy - loose language on my part...the account is opened in the name of my Trustee.

[Andrew from Vista Financial 638]

No all good, sorry I mean an actual Bank Account (with foreign currency options) ie HSBC/CBA etc and receive the funds into that account and then use TorFX thereafter to convert to AuD.

I believe otherwise TorFX will provide an account that is owned by them (not the SMSF) before they allocate it to you/SMSF as the 'beneficiary' and therefore Hargreaves are being asked to do a transfer to a different entity. 

We have had to do this in the past with different SIPP companies and had to have a Foreign Currency Bank Account opened that was owned by the SMSF to receive the funds in the first instance.

Hope this helps.

Andy 

Edited Thursday at 06:09 by Andrew from Vista Financial

[jldathome 3]

Thanks Andy - unfortunately, this does make sense based on that subtle technicality. I did actually have a Citibank Australia account until last week when it was closed on account of NAB buying their business! Thanks for the tip.

[nickb787 1]

I used Commbank GBP account in the name of my SMSF, had no issues with the money being released into that account.
 

Just remember the ATO will assume exchange rate on the day you transfer into that account, could be an issue if you transfer a large amount and don’t exchange the day but over time and exchange rate falls.

[InnerVoice 388]

On 25/05/2023 at 16:12, jldathome said:

Thanks Andy - unfortunately, this does make sense based on that subtle technicality. I did actually have a Citibank Australia account until last week when it was closed on account of NAB buying their business! Thanks for the tip.

@jldathome that's interesting. I also have a Citibank Australia account and mine hasn't been closed, nor have I received any notification that it will be.

[jldathome 3]

17 minutes ago, InnerVoice said:

@jldathome that's interesting. I also have a Citibank Australia account and mine hasn't been closed, nor have I received any notification that it will be.

@innervoice might be an idea to call them as my letter basically stated that if I had GBP funds sitting in my account at the point of closure, they would auto-convert to AUD without further notice. My account also still looks open, but I was warned that after 18th May it could close at any point thereafter. I'm guessing they'll stage the closures that said.

[InnerVoice 388]

33 minutes ago, jldathome said:

@innervoice might be an idea to call them as my letter basically stated that if I had GBP funds sitting in my account at the point of closure, they would auto-convert to AUD without further notice. My account also still looks open, but I was warned that after 18th May it could close at any point thereafter. I'm guessing they'll stage the closures that said.

@jldathome thank you for that info. I think we may have different accounts, although I will still check with them anyway. My account only supports Australian dollars, so no GBP funds, and is now called Citi Australia (although it used to be Citibank Australia). This is where I log in...

https://www1.citibank.com.au/

[Ken 1,567]

1 hour ago, InnerVoice said:

@jldathome thank you for that info. I think we may have different accounts, although I will still check with them anyway. My account only supports Australian dollars, so no GBP funds, and is now called Citi Australia (although it used to be Citibank Australia). This is where I log in...

https://www1.citibank.com.au/

NAB didn't acquire Citibank Australia in order to close it down. Your account will be open for the long term. However, if you look on their website there is no mention of foreign currency accounts. This would appear to be a service that Citibank provided that NAB have not continued.

[InnerVoice 388]

32 minutes ago, Ken said:

NAB didn't acquire Citibank Australia in order to close it down. Your account will be open for the long term. However, if you look on their website there is no mention of foreign currency accounts. This would appear to be a service that Citibank provided that NAB have not continued.

Many moons ago I had a Citibank UK account. This was linked internally to my Citibank Australia account so I could transfer funds between the two instantaneously, and without any fees. It was very convenient. Then one day Citibank UK informed my that they were no longer servicing retail customers and closed my account over there, so that was the end of that!

[Parley 7,356]

3 hours ago, Ken said:

NAB didn't acquire Citibank Australia in order to close it down. Your account will be open for the long term. However, if you look on their website there is no mention of foreign currency accounts. This would appear to be a service that Citibank provided that NAB have not continued.

NAB already have their own Foreign Currency Accounts https://www.nab.com.au/business/business-bank-accounts/specialised-accounts/nab-foreign-currency-account

Every bank will offer the same type of accounts. You just need to ask.

Eventually they will probably convert a citibank account to their own NAB closest product.