Is an Australian QROPS Right for you?
Whether you have already made the move or are in the early stages of planning your move to Australia, it is imperative you think about your private and workplace pension schemes and seek advice to determine whether it could be advantageous for you transfer your UK pension to an Australian QROPS.
Transferring your UK pension to an Australian QROPS could allow you to benefit from many advantages, such as receiving a 100% tax free lump sum instead of just 25% in the UK and increased flexibility of taking income from your pension. Australian QROPS can also make it easier for you to pass on your wealth in the event of your death and may reduce the inheritance tax liability.
As an international financial advisory and pension transfer specialist, our experienced team of advisors at Prism Xpat can support and guide you through all aspects of transferring your UK pension scheme to an Australian QROPS. While there are many benefits of transferring your UK pension to a QROPS in Australia, there are also some limitations and restrictions to be considered, and a transfer is not always in your best financial interests.
What’s changing with Australian QROPS?
There are some important changes to Australian QROPS coming into force from 1st July 2017. The new rules mean you will need to consider the amount of your UK pension transfer which will count against your non-concessional cap and those caps will depend on whether you make the transfer before or after the new rules are implemented from 1st July 2017. The current and new rules are as follows:
Current rules / pre 30 June 2017:
- The Government has confirmed non-concessional contributions will continue to be subject to a yearly cap of $180,000 for members 65 or over, but under 75. A bring forward rule applies to members under age 65 for the amount of $540,000 over a three-year period.
New rules / post 1 July 2017:
The 1 July 2017 Super changes mean:
- A yearly cap of $100,000 per annum for members 65 or over but under 75. A bring forward rule applies to members under age 65 for the amount of $300,000 over a three-year period.
- A lifetime contribution limit of $1.6 million will also apply. If your total super balance is over $1.6 million you won’t be able to make any further non-concessional contributions to super from 1 July 2017. Any super monies you have in your retirement income account is included towards this threshold.
- Prescribed reporting and compliance requirements to the HMRC as part of the QROPS requirements. This obligation continues until 10 years has lapsed from the date of the transfer of UK sourced monies into the SMSF.
If you are unsure how these changes will affect your Australian QROPS, whether a QROPS could still be beneficial for you or have any questions about transferring your UK pension, our experienced team of expat pension advisers will work in partnership with you to ensure you are taking the best course of action for your circumstances.
At Prism Xpat, as an international financial advisory and expat pension advice specialist, our experienced team of advisers can support and guide you through all the options available to you for your pensions when you are moving to Australia, including transferring your UK pension to an Australian QROPS.
Please contact us at welcome@prismxpat.com or by phoning +44 345 450 4004 for further information, or to have a free, no-obligation chat about your own circumstances.