Gateway Investment Solutions can assist you if you want to transfer your UK pension funds to Australia when you migrate to Australia or if you an Australian Citizen who is returning to Australia from working in the United Kingdom. We can advise you on whether it is to your benefit to transfer your UK pension funds to Australia. By transferring your UK pension funds you may be able to avoid potential tax charges. UK pension transfer rules can be complex and taxation and Australian superannuation issues need to be considered before a UK pension transfer to Australia is permitted. We specialise in the transference of personal and company UK pension funds to Australia. Contact our financial advisers in London UK, Brisbane Queensland, Melbourne Victoria, or Perth Western Australia for expert and professional advice and information.
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If you are British migrant with UK pensions funds to transfer to Australia, you need to ensure that the overseas scheme has approval from the UK Revenue as a Qualifying Recognised Overseas Pension Schemes (QROPS). In this way you can avoid significant tax charges on the funds being transferred. Contact HM Revenue and Customs for a list of QROPS that have agreed to have their details published. The list of QROPS is updated at the start of each month.

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UK Pension Transfers

What is a UK pension transfer?

A UK pension transfer is the transferring of a lump sum of a preserved UK pension fund. Preserved UK pension funds are entitlements that have not commenced payment. That is, an individual is not receiving an annual pension from the fund. In the UK, preserved funds are usually known as “deferred”, “frozen” or “paid up”.

Whilst each transfer is different and will therefore take varying amounts of time to transfer, generally the whole process takes between 6 and 16 weeks.

Transferring UK Pension Funds to Australia

Whether you have recently migrated to Australia or have returned here after working in the United Kingdom, it is essential that you seek accurate and professional advice on the taxation environment in the UK and in Australia.

Whilst it may not always be necessary to transfer your UK pension funds to Australia, it is important to have up to date and comprehensive knowledge of the rules and regulations, so that you can make an informed decision based on your needs.

At Gateway Investment Solutions Pty Ltd, we specialise in assisting British migrants and returning Australian citizens in their action plans and decisions concerning their UK pension benefits. Before your funds are transferred, a detailed calculation is made of the relative merit of transferring a fund. By comparing the cash flows that are expected from the funds if left in the UK with the cash flows that would be expected from an income stream paid from an Australian superannuation fund at retirement we determine whether the funds should be transferred. In some cases we recommend that the funds not be transferred e.g. with some defined benefit pension funds.

Why transfer?

It can be to your advantage if you transfer your UK personal or company pension funds to Australia as a lump sum if you:

  • Have just returned from working in the UK
  • Have migrated from the UK to Australia

The reason for this is due to the fact that Australia provides favourable tax concessions on retirement income that is received from an Australian superannuation fund. However, retirement income source from a UK pension scheme, including the UK Tax Free Cash Lump Sum will be fully taxable in Australia.

Important changes in the UK Pension Transfer Rules

On 6th April 2006, Her Majesty’s Revenue & Customs implemented new Pension Simplification regulations. The new rules, which came into effect in the UK, affect the transfer of UK pension funds to Australia.

As a result of the changes, it is now necessary to transfer UK pension funds to a Qualifying Recognised Overseas Pension Scheme in Australia, otherwise a tax charge of up to 55% may be deducted from your UK pension funds. This usually needs to be actioned within 6 months of arriving in Australia so as to avoid potential tax charges on any increase in value of the funds.

Our financial team at Gateway Investment Solutions Pty LTD specialise in the transference of personal and company UK pension funds to Australia.

Arrangements set up between Gateway Investment Solutions Pty LTD and Qualifying Recognised Overseas Pension Schemes in Australia mean that if you transfer your UK pension funds to Australia using a specialist pension transfer company like Gateway Investment Solutions Pty LTD you will not lose up to 55% of your funds in tax.

Advantages of transferring your UK pension to Australia

  • Investment Returns – If you choose to transfer your retirement benefits to a superannuation scheme in Australia, you are more likely to achieve a higher annual return due to having more local control and investment choice. Generally, growth in a UK pension fund is restricted to 5% per annum.
  • Control – By transferring your pension scheme to Australia you will maintain your pension benefits at retirement, avoiding the difficulties encountered due to schemes being wound up or under-funded, issues that are not uncommon to UK pension schemes.
  • Flexibility – In Australia, there is no requirement to purchase a life pension/annuity. Unlike the UK, you can draw your benefits as a retirement income (allocated pension), as a lump sum or as a combination of both.
  • Superior Death Benefit – In Australia, death benefits payable from Australian superannuation funds are 100% of the fund value. However, in the UK, an annuity or guaranteed pension on death of a surviving spouse is completely lost.
  • No long term currency risk – you will eliminate the long term currency risk incurred when transferring foreign currency if you transfer your UK pension funds to Australia.

What you need to know about transferring your UK Pension to Australia

Whilst the recent new legislations will make it easier to transfer UK pension funds to Australia, the transfer process is still time-consuming and confusing. There are a number of requirements that need to be met before pension transfer is permitted.

Furthermore, taxation, Australian superannuation and Centrelink issues also need to be considered before making the decision to transfer.

Transfer Requirements

  • The applicant must have made a permanent departure from the UK with no intention of returning there to work or retire.
  • The individual must be employed or self-employed in Australia.
  • The person must have Australian residency for tax purposes.
  • No part of the UK Benefit is to have commenced paying a pension.
  • Payment is to be made directly from the UK scheme to an APRA approved Australian superannuation fund.

For more information or advice on UK Pension Transfers, please contact our financial advisors.

Gateway Investment Solutions Pty LTD ACN 104 872 620 is an Authorised Representative of Apogee Financial Planning ACN 056 426 932 an Australian Financial Services Licensee with its registered office at 105-153 Miller Street North Sydney NSW 2060.