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Pension Transfers to NZ & Australia
The UK tax rules provide excellent tax breaks for people saving for their retirement.
Contributions into UK pension funds are tax-free. If you wanted to put say £1000 into a pension fund- you may only have to contribute personally £780 (or £600 if higher rate taxpayer) and the Government puts in the rest. Furthermore contributions into an employer-provided scheme may also mean savings in National Insurance.
Unfortunately the money must usually stay in the UK fund until you retire, and is then taxable back in your home country when the funds are paid out in the UK.
However, if you move to New Zealand or Australia permanently your pension fund can go with you, subject to some new rules introduced in the UK in April/06.
UK Pension Simplication Rules - Affect on Transfers
On the 6th April 2006 the new “pension simplification” regulations come into effect in the UK.
The good news is that transfers overseas are not an “Unauthorised Payment”
However, each overseas scheme that wishes to accept transfers from The UK must now become a “Qualifying Recognised Overseas Pension Scheme” (or QROPS).
Only some of the rules relating to this facet of the regulations have been published. It is known that all QROPS will have to report back to HMRC any payment made to a member in respect of the amount that was transferred from the UK. This will include the date, amount and “nature of the benefit” and the current address of the member.
As most overseas schemes are as yet unsure of what they will be required to do to be able to accept UK pension transfers few (if any) have applied for QROPS status.
For more information Contact us here at DMS and we will assist you in making the right decision.
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Dynamic Management Solutions Limited is a company registered in England and Wales with company number 3652783
and whose business address and registered office is 3rd Floor, 3 Copthall Ave, London, EC2R 7BH |
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