The main benefits that a UK expat pension member – who is now a permanent resident of Australia – may have when considering a UK pension transfer to Australia, is the tax free income and lump sum that that the may receive at retirement age 60 from an Australian QROPS (Qualifying Recognized Overseas Pensions Scheme).
UK expat pension member in Australia, who is several years from retirement, may consider a UK pension transfer to Australia for investment reasons rather than for the benefits that they could obtain in the future.
As far as UK pension plans are concerned certain assets held in schemes are considered ‘taxable property’. These assets include residential property, fine art, classic cars, antiques, jewellery etc. Would a pension transfer to Australia (or any other QROPS scheme) therefore, allow you to invest in something that would otherwise be deemed as taxable property in the UK?
The answer to this is no. The rules on these types of investments have been clear from day one of the QROPS legislation (6th April 2006). Investments such as residential property, within QROPS, are taxable throughout the period that the individual’s membership of the QROPS. This is an important distinction to payments to members, which are more flexible outside of the QROPS reporting period.
The major advantage of an Australia QROPS is that a member can access 100% of the fund, at retirement, after the Reporting Period. Therefore, if an individual wishes to purchase a residential property after they have received their funds from the scheme at retirement, they could have the option to do so.
