The Tricky Bits
When transferring a UK pension fund to Australia, it is necessary to negotiate complex UK and Australian tax legislation. The tax penalties for failing to observe all of the rules range from 40% to 55% so a mistake can be extremely costly.As a firm of Chartered Accountants we are used to reading and interpreting complex tax regulations and are therefore better able than many other providers to ensure that the transfer of your pension fund does not fall foul of the rules.
The table below shows some of the rules, together with the tax penalties which will be charged if they are broken:
|
The rules |
Tax penalty for breaking the rules |
|
You must transfer your UK pension fund into a Qualifying Recognised Overseas Pension Scheme (QROPS) |
55% |
|
The sum transferred from the UK must remain within a QROPS for five complete UK tax years after your departure from the UK |
40% - 55% |
|
The sum transferred from your UK pension fund must not exceed the Lifetime Allowance when added to other crystallized pension benefits. |
55% |
|
Benefits taken from your superannuation fund within the first five complete UK tax years after your departure from the UK, must not exceed those allowable under UK legislation |
40% - 55% |
|
The capital element (i.e. the value of your UK pension fund at the date you became tax resident in Australia) of the sum transferred from the UK must not exceed the non-concessional contributions cap |
46.5% |
Colette Pieniazek
Client Liaison Consultant
