Why QROPS advice is essential for UK pension transfers to Australia
If you decide to transfer a UK pension to Australia without seeking specialist QROPS advice (or with assistance from your Accountant or Financial Adviser) you could risk increasing your overall costs unless your Accountant/Adviser is also a QROPS expert.
Nik Hayes a former UK Chartered Accountant now living in Australia, explains why he sought expert QROPS advice for his own transfer, despite having substantial financial expertise himself.
For most, the risk of higher costs and/or potential penalties is too high. As Nik Hayes states, “let the experts handle the complexities of QROPS and the tax calculations for you”.
Experience has proven that people who do not seek QROPS expertise for their transfer:
|May overpay on tax||In particular for Defined Benefit scheme transfers on the ‘applicable fund earnings’ calculation|
|Often lose out on a poor ‘retail’ exchange rates||If not retaining £GBP, Sterling Planners have access to institutional (wholesale) FX rates and pass these benefits in full onto our clients. Client case study illustrates a potential net gain of AUD $32,000 from favourable, wholesale FX rates.|
|May incur UK tax penalty||Up to 55% of the total transfer may incur a tax charge should HMRC deem it to be an unauthorised payment.|
IMPORTANT: It is imperative that the transfer is compliant i.e. complies with all the UK QROPS/ROPS rules and the Australian ATO tax rules. In addition, HMRC do not guarantee that transfers to schemes on the ROPS list will be free of tax. It is your responsibility to find out whether you have to pay tax on any transfer of pension benefits, further supporting the need for specialised QROPS advice.
If your enquiry relates to a UK State Pension i.e. the Old Age Pension from your national insurance contributions or if you have an unfunded Civil Service Pension e.g. NHS, Teachers, Police, Armed Forces etc.. then our e-book will not be relevant. You need to contact your UK scheme directly as they are not eligible to transfer to Australia.