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Transferring Your UK Pension To An Australian Superfund
Do you have a UK Public Sector pension entitlement? Better read this!

As of 6 April 2015, being able to transfer the UK Public Sector entitlements to an Australian superfund has become a much more complicated process. The major change that was enforced after this time was the prohibition of anyone under the UK pension age of 55 to transfer their funds to Australia, as well as the disqualification of any existing Australia QROPS (Qualifying Recognised Overseas Pension Scheme) funds. The main reason for this change is that under the Australian law those who were under retiring age, but were affected by significant financial hardship, were able to apply to access these funds early.

 

Eligibility Requirements

  • Must first be over the minimum age of 55 to be able to be eligible for the transferring of funds.
  • Check to see if your UK superfund is recognized as a QROPS. You can check your superfund by clicking here
  • If you either have a self-managed superfund SMSF, or your current superfund is not on the list, them you may need to obtain legal and financial advice on how to comply with the QROPS requirements.
  • If you decide to set up a SMSF you will then need to apply online to the HMRC (Her Majesty’s Revenue and Customs) to become registered as QROPS.

 

Things to Consider

  • Once the transfer has been undertaken, it becomes irreversible. This means that if you decide later down the track that you would like to return to the UK, you cannot transfer any existing funds in your new Australian superfund, back into your UK fund.
  • You do not need to convert your funds into Australian dollars. Once your money has been transferred it is up to you when, or if, you would like to convert it. Many people hold off, waiting for a time when the exchange rates are at their optimum.
  • The Australian Taxation Office (ATO) does not see the transferring of monies as the mere rolling over, but as a new contribution all together. This means that there are certain taxes that may me imposed in certain circumstances.
  • Instances where no tax will be applied are in cases where the member has transferred the funds within 6 months of becoming an Australian resident for tax purposes, or their foreign employment being terminated.
  • Any income made after these 6 months will be subjected to the concessional superannuation earnings rate of 15%
  • If you do not transfer your UK Pension fund to an Australian QROPS superfund, but rather a fund which in non-complying, you may be subjected to a tax penalty of up to 55% by the HMRC