UK Pension - consolidation and future transfer thoughts

[Andrew from Vista Financial]

On 18/07/2023 at 12:37, Ken said:

I actually said "to maximise the amount you can get tax free", but otherwise yes. You don't need to declare the AFE of separate funds that you aren't transferring until a later year when you do so, and by then you'll have more tax free and low tax allowances and Concessional Super Caps available.

Yes you did say that, sorry, typo on my part.

Yes correct, if transferring a pot with a lower AFE amount it is possible for an inidividual to elect to pay the tax at their marginal rate and this may make sense for some.

In my experience it is quite rare and that's likely to be the size of the pots we deal with being much higher (generally higher AFE) and typically MTR's higher than 15%. 

Edited July 19, 2023 by Andrew from Vista Financial

[Geebs1963]

If transferring a UK pension to a self managed fund in Oz how long before you could, theoretically, remove the full amount from the SMSF? SMSF scare me due to the admin so I'd prefer to "cash out" and buy an investment property and rely on the rent to supplement my existing Australian Super fund?

[Marisawright]

1 hour ago, Geebs1963 said:

If transferring a UK pension to a self managed fund in Oz how long before you could, theoretically, remove the full amount from the SMSF? SMSF scare me due to the admin so I'd prefer to "cash out" and buy an investment property and rely on the rent to supplement my existing Australian Super fund?

SMSFs scare me too!  However you won't be able to cash any of it until you get to your preservation age, whatever that is in your case.

[Geebs1963]

So, the obvious question, is what is the preservation age? My intention was to do this at age 65 and retired ie no other earnings?

[Ken]

6 minutes ago, Geebs1963 said:

So, the obvious question, is what is the preservation age? My intention was to do this at age 65 and retired ie no other earnings?

If you were born after 30th June 1964 then your preservation age is 60, provided you have retired or met one of the other conditions of withdrawal. Once you have reached the age of 65 you can withdraw your funds from Super whether you have retired or not.

Anyone born before 1st July 1964 has already reached preservation age as it was originally 55 and increased in steps up to 59 and then 60 for those born after 30th June 1964. 

[Geebs1963]

So, I was born in 1963, and intend retiring in 2028 and was informed the most tax efficient way of bringing the money/pension across was to put it into a SMSF (the $330k pay forward discussion elsewhere) but they seem “difficult”. You seem to be saying I could remove the monies from the SMSf “the next day” after setting it up without a tax penalty?

[Marisawright]

Just now, Geebs1963 said:

So, I was born in 1963, and intend retiring in 2028 and was informed the most tax efficient way of bringing the money/pension across was to put it into a SMSF (the $330k pay forward discussion elsewhere) but they seem “difficult”. You seem to be saying I could remove the monies from the SMSf “the next day” after setting it up without a tax penalty?

If you are so close to retiring, why wouldn't you leave your money in your UK pension until you can access it?  

[Geebs1963]

That is my intention - my wife is closer to retirement so the question relates to her also. I prefer to have the money within Australia if I can do it somehow without getting taxed to pieces!

[Marisawright]

15 minutes ago, Geebs1963 said:

That is my intention - my wife is closer to retirement so the question relates to her also. I prefer to have the money within Australia if I can do it somehow without getting taxed to pieces!

Have you had advice from a professional who understands both tax regimes?

As I understand it, you're proposing to transfer your UK pension into a SMSF, but as you're already at preservation age, you'll cash it out almost immediately and invest in something else.

There will be costs associated with setting up the SMSF and then more costs associated with submitting tax returns for its brief existence, and then more costs associated with closing it down.  I would be checking very carefully on the costs of all the various options available to you.

[Geebs1963]

Hi Marisa,

 

Thanks for the advice and yes, info coming from a professional on getting the pension across into a SMDF is "tax efficient". Of course I could leave it in the UK and transfer monies "piecemeal" so to speak but you're at the vagaries of the money markets at that point which makes financial planning on a monthly basis tricky!

We're looking to transfer everything in a few years from now when actually retired so we won't have any other income - the costs of SMSF are an issue along with shutting it down etc but they, surely, can't be higher than the tax if I bring the pension across as a lump sum and ATO have a field day at 40%?

[Andrew from Vista Financial]

8 hours ago, Geebs1963 said:

Hi Marisa,

 

Thanks for the advice and yes, info coming from a professional on getting the pension across into a SMDF is "tax efficient". Of course I could leave it in the UK and transfer monies "piecemeal" so to speak but you're at the vagaries of the money markets at that point which makes financial planning on a monthly basis tricky!

We're looking to transfer everything in a few years from now when actually retired so we won't have any other income - the costs of SMSF are an issue along with shutting it down etc but they, surely, can't be higher than the tax if I bring the pension across as a lump sum and ATO have a field day at 40%?

Hi

If the SMSF vehicle the only option that the Adviser has suggested?

There is a retail (QROPS) Super scheme in Australia that will accept UK Pension Transfers if you are not aware, we would never recommend a SMSF for a person looking to open and close pretty much straight away, complete waste of money!!

Regards

Andy

[Marisawright]

11 hours ago, Geebs1963 said:

Thanks for the advice and yes, info coming from a professional on getting the pension across into a SMDF is "tax efficient".

Andrerw beat me to it.  I was going to say, why not move it to the retail fund instead?  There is only one that can do it, and it's fairly new, so maybe the adviser wasn't aware of it.  I suggest having a chat with Andrew.

[Ken]

8 hours ago, Marisawright said:

Andrerw beat me to it.  I was going to say, why not move it to the retail fund instead?  There is only one that can do it, and it's fairly new, so maybe the adviser wasn't aware of it.  I suggest having a chat with Andrew.

Or maybe the Commission rate for the retail fund isn't as good as the fees the adviser gets for setting up a SMSF?

[Dunroaming]

Well when I looked at the moving of my  UK pension to Australia it looked so complicated, plus so many pitfalls for Getting caught for tax , so I used Vista Financial  so glad I did the paperwork required was enormous did not help my UK pension provider losing paperwork, but Andrew was amazing keeping me updated throughout process, I could not have envisaged trying it on my own , so my advice would be unless your a Financial Advisor trust the professionals . I can say from experience you won’t do better than Andrew at Vista .

[Andrew from Vista Financial]

12 hours ago, Dunroaming said:

Well when I looked at the moving of my  UK pension to Australia it looked so complicated, plus so many pitfalls for Getting caught for tax , so I used Vista Financial  so glad I did the paperwork required was enormous did not help my UK pension provider losing paperwork, but Andrew was amazing keeping me updated throughout process, I could not have envisaged trying it on my own , so my advice would be unless your a Financial Advisor trust the professionals . I can say from experience you won’t do better than Andrew at Vista .

Thank you very much for you comments and recommendation it ismuch appreciated

[Vince]

Does anyone know any UK SIPP providers that allow split accounts to accommodate the need to split UK pension money either into accounts which separate out the 25% tax free component or the growth since arriving in Australia or the exact amount needed for transfer within the 120K non-concessional contribution cap? Thanks  

[Alan Collett]

12 hours ago, Vince said:

Does anyone know any UK SIPP providers that allow split accounts to accommodate the need to split UK pension money either into accounts which separate out the 25% tax free component or the growth since arriving in Australia or the exact amount needed for transfer within the 120K non-concessional contribution cap? Thanks  

I'm sure Andrew at Vista does - maybe liaise with him?

Best regards.