With regards to UK pensions for Australian ex-pats, this is a very complex area of planning as the main issues involved primarily require an understanding of the specific tax position in Australia first before any decisions on consolidation or transferring should be taken.
Transferring to an Australian QROPS involves complex and in-depth analysis. For example, some of the issues involved are:
- You cannot begin to transfer until age 55 and even then there is an annual contribution cap. It may take years to get all of your funds into Australia and this will require extensive planning
- There is tax due in Australia on your UK pension that is calculated as the growth in the pensions since your date of arrival and the date you crystallise any benefits. This is known as Applicable Fund Earnings (AFE) and it is vital to understand this before you can make any decisions
- If you are under 55 and may be considering a Defined Benefit Transfer (or consolidation of numerous UK pensions), we can recommend an expert SIPP company that will be able to facilitate this in preparation for you turning 55. We can also recommend investment managers that will allow you to either denominate your investments in either $Australian or £Sterling.
- If your transfer involves a Defined Benefit Pension and depending on how long you have lived in Australia, there may be a way to transfer funds over and above the annual cap by calculating the AFE in comparison to the value on your date of arrival.
This is a highly specialised area of planning which most UK IFAs do not provide advice on. As recognised experts in this field we can help. Our advice process is very in-depth and complex and will need a great deal of explanation which we will be happy to provide on a one-to-one basis.
Dominion Financial Management is not authorised to provide Australian tax advice but will introduce you to experts authorised in Australia who are as this will be essential to any planning.