Is A UK Pension Transfer To Australia Complicated?
Posted by Paul Davies on 02/11/09 14:16
The truth is that there are a lot of rules surrounding a UK pension transfer to Australia both in UK legislation and in the Australian tax rules. In the UK, for example, the introduction in April 2006 of QROPS (Qualifying Recognized Overseas Pension Schemes) meant that offshore pension schemes in all jurisdictions (and not just Australia) had to be approved and registered by the UK HMRC (Her Majesty’s Revenue and Customs) before receiving UK pension funds transferred in.
On top of this, the offshore pension scheme – registered as a QROPS – would have to follow UK rules when it came to paying out benefits. This added an extra dimension onto the Australian pension system, as the method of taking benefits from an Australian Superannuation scheme were a lot more flexible before the UK introduced QROPS.
As well as being aware as to what the UK QROPS rules are, an individual looking at a UK pension transfer to Australia would have to look at the Australian rules and limitations. One of those key rules that came into effect was the cap on how much can be transferred in, from overseas pensions, to an Australian scheme. This is part on the non-concessional cap. Add to this FIF (Foreign Investment Fund) taxation and the ‘6 month’ rule – there does appear to be more than simply transferring pension money from A to B.