UK Pension Transfers to Australia
Transfer your UK pension benefits
into an Australian super fund
Transferring your UK pension to Australia can be a complex and time consuming process. But with the right advice, it doesn’t have to be. If you’re a UK migrant or you have returned from working in the UK, the pension transfer specialists at RM Capital can help you seamlessly transfer your pension to Australia.
Thinking about moving your UK pension to Australia? Need expert advice to make the right decision?
At RM Capital, our dedicated team of pension transfer specialists can advise you on the most appropriate course of action, from a UK and Australian financial and tax perspective. Transferring your pension from the UK to Australia can be confusing, but we’re here to simplify the process for you.
To be able to transfer your UK pension to Australia, there are a number of requirements you need to meet. These include:
- You must be between 55 and 75 years of age or or a member of a local government superannuation scheme.
- If you are between 65 and 74, you must meet the criteria of a work test. To pass this test, you must have been employed for at least 40 hours in a period of no more than 30 consecutive days during the financial year.
- You must be an Australian resident and permanently left the UK.
- You can only transfer your UK Pension into an eligible Australian super fund that is registered in the UK as ROPS.
- The most you can contribute to your super in its lifetime is $1.6 million (annual contribution limits also apply).
Changes made to UK legislation in 2015 prevent anyone under 55 years of age to transfer their pension to Australia. However, it is still worth seeking expert advice, as there are important decisions to make and opportunities you can capitalise on. We can guide you through your current options and prepare you for a future pension transfer, when you reach 55+.
If you’re aged between 18 and 75, previously worked in the UK, contributed to a pension scheme and no longer a permanent UK resident, you can apply for a ROPS – Recognised Overseas Pension Scheme (previously referred to as Qualifying Recognised Overseas Pension Scheme – QROPS).
ROPS is a registered superannuation scheme that was introduced by Her Majesty’s Revenue & Customs (HRMC) to allow the transfer of pension funds from the UK. To be able to transfer your UK pension to Australia, you must obtain HRMC approval and set up a super fund under a ROPS registered scheme, majority of which are self-managed super funds (SMSF).
- Defined Contribution (DC) pension scheme
- Defined Benefit (DB) scheme
- Occupational pension scheme
- Small self-administered scheme (SSAS)
There are many advantages to consolidating your UK pension funds where you now reside. Aside from the convenience of having all your retirement savings in one manageable plan, they include:
- Tax benefits – when you turn 60 your funds become tax free and any earnings on the pension fund also become tax free. This means you’ll receive more net income to live on. And if you transfer your UK pension to Australia within 6 months of residing, you’ll also pay no tax on the initial transfer.
- Choose how you invest – you’ll gain full control of your retirement savings and how to invest it.
- No estate taxes – your UK pension funds will not be subject to UK income tax charges upon death. This means you can pass the full benefit of your super to your beneficiaries and save them many thousands of dollars.
- Lump sum payment – in Australia, you’re allowed to draw out up to 100% as a lump sum anytime. In the UK only an initial once off maximum of 25% lump sum is permitted.
- Eliminate currency risks – you won’t have to worry about fluctuating currency conversion rates.
If you decide not to transfer, your UK pension will be taxable in Australia. This includes any lump sum taken and subsequent pension payments. Once you start to receive your pension allowance this can no longer be transferred.
If you transfer your UK pension funds within 6 months of arriving in Australia, you will not be taxed. If you transfer after this time you may be taxed on the growth component of your fund. This refers to the difference in values between the date of arrival in Australia and the date the funds are received in Australia.
Speak to a pensions transfer specialist today
If you’re interested in finding out more about transferring your UK pension to Australia to determine the best move for your individual circumstances, get in touch with us today.