QROPS in Australia: Should you Transfer your UK Pension?
If you are an expat living in Australia and a tax resident in Australia with your pension in the UK, you may be liable to pay tax if these pensions are drawn from the UK. However, it may be possible to transfer your UK pension to a QROPS in Australia. Transferring your UK pension to a QROPS in Australia will allow you to benefit from many advantages, such as receiving tax free amounts and increased flexibility of taking income from your pension.
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 a QROPS in Australia. 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.
Benefits of Transferring your UK Pension to a QROPS in Australia
There are many benefits of transferring your UK pension to a QROPS in Australia: two of the main reasons are less tax liabilities on your pension, and increased flexibility in retirement.
Requirements for Transferring a UK Pension to a QROPS in Australia
There are new changes to Australian superannuations that will come into force on 1st July 2017. The new rules mean you will need to more carefully 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. From 1st July 2017, the non-concessional cap will reduce from A$180,000 p.a. to A$100,000 p.a. (representing a change from A$540,000 to A$300,000 using the 3-year bring-forward rule).
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 superannuation account is included towards this threshold.
If you are moving to or already living in Australia and are looking for independent advice on QROPS in Australia, our specialist team can advise you on your options and provide a formal recommendation on your optimal course of action. Get in touch to discuss transferring your UK pension scheme to a QROPS in Australia.