UK Migrants and Australian ex-pats!
Are you moving to Australia (or already moved) and want to transfer your UK pension moneys?
If so, the current position is that you can keep your UK pension money in the UK pension system until you are 55, then (if you want to transfer it to Australia) you will be able either to:-
- Transfer your pension money into an industry or retail Australian superannuation fund (which must be a QROPS*), or
- Set up your own Australian Self Managed Superannuation Fund (SMSF), get it on the ROPS notification list, and transfer your pension money into that.
*Qualifying Recognised Overseas Pension Scheme
This page gives information about option b. This is factual information only and in doing so it is not suggested that option b is any better than option a, this is something you will need to consider for yourself.
Also this page does not suggest that transferring your pension money to Australia when you are able to, rather than leaving it in a UK pension scheme and withdrawing it directly from there, is generally advisable or is good for you. I have written two separate pages giving information about these options. This page gives information about transfers and this page gives informaton about withdrawals from UK pension schemes (both open in new window).
It is up to you to decide what to do having gathered all available information.
SMSFs are very popular in Australia. So far there are 600,000 of them, with over a million members. 40,000 new ones are created every year. Under these schemes SMSF members save for their retirement in the scheme, control their own investments, and act as trustees for their own funds. When members are permitted to take benefits from the scheme, they can be taken tax free. This article describes how Australian super works.
You can set up your own SMSF. And once you are 55, after getting it on the ROPS notification list published by Her Majesty's Customs and Excise, you can transfer the UK pension money into it. For a money purchase (defined contribution) scheme, the actual transfer process is normally something you can do yourself (currently this is more difficult to achieve with a defined benefit scheme). You can use one of my packs to set up the SMSF. If you need any help or advice as you go along then I can also help with this.
How easy is it to do yourself?
There are four steps:-
- Satisfy yourself that it is prudent to transfer your pension and as to the correct timing of the transfer. To understand the implications please read my articles: UK pension transfer to Australia and QROPS matters: main issues and how Australian tax residents are taxed on withdrawals from a UK pension scheme (both open in new window). Then if you need any advice on this in your particular circumstances, I am pleased to assist (if you need formal legal advice this will involve a fee).
- [Provided you are aged 55 or over], if you don't already have an Australian Self Managed Superannuation Fund (SMSF), then set one up with a trust deed that will satisfy HMRC that it can be a QROPS. This is a matter of filling out various forms. There is no fee payable to register your smsf unless you use a corporate trustee when a fee is payable to ASIC. If you do already have an Australian Self Managed Superannuation Fund (SMSF) then its trust deed will need to be amended to restrict membership of the fund to those aged 55 and over.
- Ask HMRC to put your SMSF on the ROPS notification list. A form is required to do this. There is no fee payable.
- Transfer your pension money into your SMSF. Here you are filling out the forms provided by the UK pension fund managers, managed fund trustee, or SIPP provider. If there are any fees to pay they are very limited because of the pension rules. The exception to this is if the UK scheme is defined benefit (salary based): currently this gives rise to fees payable to a UK financial adviser.
Steps a, b, c and d are all described in detail in the set up pack to start a new 55+ qrops smsf and in the smsf to qrops pack (for the amending pack).
So this is what you need to do this yourself:-
- To set up an SMSF and register it as a 55+ QROPS:
There is a complete pack of documents being all you need to set up your 55+ qrops Australian self managed superannuation fund with either a corporate trustee or individual trustees, together with a comprehensive step by step guide explaining how to do this, how to complete Form APSS251 for Her Majesty's Customs and Excise, how to get the fund on the ROPS notification list, and how to transfer your UK pension moneys into it. See details of the appropriate packs (either for a corporate trustee or individual trustees). Click here for help how to decide whether to use a corporate trustee or individual trustees for your SMSF and here to understand the implications of doing this.
- If you already have an existing Australian SMSF and you want to get it on the ROPS list so that it can receive a transfer of your UK foreign pension fund moneys:
This pack contains all you need to obtain qrops status for your existing compliant self managed superannuation fund with either a corporate trustee or individual trustees. It has a comprehensive step by step guide explaining how to do this, how to amend your fund's trust deed to make it QROPS compliant, how to complete Form APSS251 for Her Majesty's Customs and Excise, how to register the fund as a qrops, and how to transfer your UK pension moneys into it. See details of the pack and understand the implications of doing this.
What about timing? If you are 55 or approaching that age and still in the UK, then ideally you would start work with one of these packs about two months before you leave the UK. However this is not essential, and you can set up an SMSF and transfer UK pension moneys after you have moved to Australia. If you are approaching the age of 75 however, you may have to act quickly. This is because you will not be able to make a transfer once you reach that age. There may also be restrictions after age 67. See more information about these matters.
Do you need advice? If having read my article: Pension transfer: main issues for uk migrants you feel that you need advice as to prudence and timing of the process, whether it is right for you, advice about what you can do with your fund, or other pertinent advice:-
Contact me and make an initial enquiry. I am happy to answer questions. If a formal advice is required I can provide a quote for a full legal advice to suit your own personal circumstances.
All document drafting is carried out and legal advice is given within the rules of the Queensland Bar Association and as regulated by the Bar Standards Board (England and Wales) and is fully insured in one or other jurisdiction or both. Liability for work in Australia is limited by a scheme approved under professional standards legislation.
See more information
19 May 2021
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