The Tricky Bits
British Pension - QROPS
At UK Pension Transfers, we can transfer your British pension fund into a Recognised Overseas Pension Scheme (QROPS).
When transferring a British 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 more qualified than many other providers to ensure that the transfer of your British pension fund does not fall foul of the rules and cost you money.
The table below shows some of the rules that have to be adhered to while transferring your British pension fund, 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% |
What is a QROPS?
QROPS stands for Qualifying Recognised Overseas Pension Scheme, an Australian Superannuation Scheme which has been approved by HM Revenue & Customs to accept the transfer of pension funds from the UK. Every QROPS adheres to requirements in order to gain approval from HMRC and can accept transfers from a UK registered pension scheme.
Colette Pieniazek
Client Liaison Consultant
