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UK Pension (QROPS) Transfers to Australia - Latest Update

31 August 2017

August 2017 Update.

The HMRC ROPS list, published on August 15, contained 1035 schemes globally, of which 464 were in Australia (representing almost 50% of the total). Earlier this year, the UK Govt announced a major change to QROPS regulations, effective from 9 March 2017, called the OTC (Overseas Transfer Charge), a 25% tax charge on transfers, targeting transfers to places like Gibraltar or Malta when the client was not also residing in those countries (for more details refer 25% tax on QROPS transfers). After the announcement, HMRC suspended the ROPS list two times [from the 14th -18th April and the 2nd - 7th June 2017] to make the necessary amendments. The resulting compliance crackdown saw 410 QROPS being removed from the ROPS list globally and several jurisdictions stopped listing QROPS completely.  The most significant changes to QROPS regulations occured back in 2015 as the UK government moved to crack down on what it said was the mis-use of pension transfers to enable people to access their pensions before the age of 55. Since then, there has been 52% fewer overseas pension transfers than the peak year of 2014-2015, in which 20,100 were transferred compared with 9,700 transferred in the 12mths to 5 April 2017.

Transfers to Australia are currently possible for clients aged 55yrs and over, satisfying the work test (if 65 yrs or over) with permanent residency status in Australia or citizenship, who are currently resident in Australia, with a transfer value of GBP 100k or greater with an eligible UK pension schemeOver 55 SMSF Transfer Option. If you are under 55 yrs with a UK DB Scheme (Final Salary scheme), refer to our Under 55 Secure CETV Option.

We do not recommend transfers to offshore schemes such as Malta, NZ, Gibraltar, Guernsey or Isle of Man etc [unless the member is resident in the country of transfer as per the recent March 2017 HMRC announcement -  HMRC Tax on Offshore QROPS.

Download our Free UK Pensions E-book for a comprehensive UK pension transfer checklist.

Why you need QROPS Advice - How expert advice could potentially save you thousands on your UK Transfer.

Who is Eligible to Transfer their UK pension? To make a compliant UK pension transfer, you must either be:

  • A member of a public service superannuation fund on the ROPS list (as at June 2016 these included - Australian Defence Force Super Scheme / CSS(Commonwealth Super Scheme) / Local Govt Superannuation Scheme / Military Super and Benefits Scheme / Public Sector Super Accumulation Plan / Public Sector Super Scheme)
  • Or, you must be 55 yrs of age (or older), with permanent residency status in Australia, satisfy the work test (if over 65yrs old) with a transfer value of GBP 100k or more. These transfers are now possible via the set-up of an Over 55 SMSF (Self Managed Super Fund) with appropriate ROPS certification from HMRC. 
    For details of our Over 55 SMSF Transfer Option click here - Over 55 SMSFs.

Not Eligible for Transfer (effective April 2015) - All unfunded Civil Pension Schemes (eg NHS, Police Pensions, Teachers Pensions, Firefighters, Armed Forces etc - click here for more information.) and all UK State Pensions (i.e. Old Age Pensions from your National Insurance contributions.)

Brief history of the QROPS situation - refer to our QROPS webpage
Details of our Over 55 SMSF service offering - click here.
Details of our QROPS Advice document and fees - refer to our UK Pension Report and Fees page.
Details of our Under 55 Secure CETV to UK SIPP - for clients aged under 55yrs with Defined Benefit/Final Salary Pensions in the UK, please click here.

Post 6 April 2015 Transfers - HMRC Tax Relief Decision – for UK pension transfers made after 6 April 2015 and before 1 July 2015, HMRC announced in July 2016 that these transfers do not constitute unauthorised payments and therefore will NOT be subject to the 55% penalty tax - click here for details.

Note: The QROPS (now ROPS) list is self-certified and cannot be relied upon to avoid potential penalties. It is ultimately the responsibility of the member to determine whether or not their receiving scheme complies with QROPS regulations.

Contact our client service team on 1300 132 737 if you have any questions.

 


New UK Transfer Options for Clients with Australian Super Balances close to the Cap of $1.6M.

15 May 2017

May 2017 Update - From 1 July 2017, clients who are close to or have already reached their total Australian super fund balance of $1.6M, may have viable options to transfer additional UK pension funds to their Australian (complying ROPS) fund.  Specialist financial advice should be sought to navigate the options available with respect to each client's individual circumstances. 

The Advice Fee for a detailed analysis and strategy recommendation is $1,650 - click here for details.


Contact our Client Service Team on 1300 132 737 for further information.