Transferring a pension FROM Australia?

Ozzybound

Hello,

I have a general query regarding transferring pensions around that I wonder if some one can help me with?

My partner and I are moving to Australia in October.

Once in Australia, our UK pension funds will become classed as foreign investments and we will have to pay tax in Australia on the increase in value of the fund each year.

My initial thoughts were that we would transfer our UK pension funds into an Australian pension fund - thus eliminating this tax issue. It seems straight forward enough to transfer a UK fund to an Australian fund as long as the Australian fund is QPROPS, ( if I have the name right? ).

However, we don't know if we will stay in Australia for ever, so we thought there may come a time when we need to transfer the Australian pension back to the UK. No problem I thought.

I have since seen posts on another forum that although you can transfer funds from the UK to Australia - you CANNOT transfer them back from Oz to UK? Does anyone know if this is the case?

If it is the case, and we moved back to the UK in say 5 years after already moving our pensions to Australia, would we then pay UK tax on any increase in value of the Australian funds?

It seems ridiculous to me that you can transfer only in one direction.

Thanks for any info.

AussieLass

Do you mean superannuation funds?

Ozzybound

AussieLass wrote: »

Do you mean superannuation funds?

Yes, I believe so.

Are super funds different to pensions? Can you have a super and a pension in Australia?

I assumed that when my prospective employer in Oz pays super for me, that the pot it goes into would be the same pot I can transfer my UK pension fund into. Then, if we move back, I could transfer the whole lot back to the UK - ( ie the original UK transfer and the Australian super? ).

Thanks.

AussieLass

Yes super funds are different from the pension.

We don't have a *pension fund* as such. We automatically receive a pension on retirement.

Our super fund consists of employer contributions & voluntary contributions we want to make into it. It's encouraged by the Oz govt to do so as they only provide a basic pension and it's up to us to provide the extra's ourselves BUT it's not compulsory to contribute personally only your employer HAS to contribute.

Here is some info I found on the CBA website - Moving to Austalia http://www.migrantbanking.co.uk/moving_to_australia/frequently_asked_questions/How can I transfer my pensions payments to Australia or New Zealand?
Most pension authorities (including the DSS) can transfer payments direct to accounts abroad. Once an account has been established for you in Australia or New Zealand we will be in a position to provide you with the relevant account number and details to facilitate such payments.
Will I have to pay tax in Australia or New Zealand on the interest or growth on any investments I leave in the United Kingdom?
Once you have taken up residence in Australia or New Zealand the local Tax Office will assess your world wide income when calculating your tax liability. There is a double taxation agreement between Australia / New Zealand and the UK – which means you will not pay tax twice – however a tax free investment in UK (including TESSA's, ISA's and "off shore" accounts) will probably attract tax in your new country.
NB This information is of a general nature only. We recommend you contact a qualified tax adviser regarding your individual circumstances and any taxation concerns you may have.

Ozzybound

So, basically the Australian 'super' is like a UK private pension, ( only the employer HAS to pay into it ).

In that case then, can my UK private stakeholder pension be transferred into my Australian Super account?

....and then in the future, can that whole Australian Super fund be transferred back to a UK stakeholder pension?

Thanks.

AussieLass

Sorry I can't really advise you for sure. I was hoping someone more knowledgeable would post on this subject. If you check out the website British expats they will probably have all your answers. HTH.

Ozzybound

No problem - thanks AussieLass.

Cook_County

Yes - the UK will permit/welcome transfers in; but why would you want/need to do so?

Ozzybound

I may never need to do transfer it back. What I am worried about is if we move our UK pensions to Australian pensions when we move out there in October, we'll never be able to move them back if need be in the future.

It makes sense to move them over when we go, as otherwise we will pay Australian tax on the increase in value of them each year as they are classed as a foreign investment fund by Australia. If we move them, and stay in Australia for the rest of our lives - then retire out there, then great - no probs.

But - what if we come back to the UK in say 20 years, before we retire?. What I am worried about is our pensions being stuck in Australia and then us getting taxed on them in the UK. I just assumed that it would be better to have your pension fund based in the country that you are resident in.

If it is easy to transfer from Oz back to UK, and can be done, then there is nothing to worry about. We'll transfer our pensions to Australia as soon as we arrive.

We needed to make the decision as soon as possible, as if we wait until we have been resident in Australia for 6 months before transferring, we'll be hit with a huge tax on the transfer amount.

Thanks.