A GUIDE TO YOUR PENSION TRANSFER
Total Wealth Advisory (TWA) are specialists when it comes to the transfer of your overseas pension. We can assist you
every step of the way to ensure the transfer takes place smoothly, efficiently and your funds arrive safely.
Step One
- Discuss your requirements with TWA.
- Tog ether, complete the documentation needed to review and consider your options.
- TWA shall write to your overseas fund provider request your retirement information, transfer values, death and other benefits and obtain the discharge documentation
(NB-it can take several weeks for your overseas pension provider to send these details to us)
Step Two
- TWA will refer you to a reputable advisor if you do not have your own advisor to discuss your retirement Investment strategy and discuss superannuation funds which have QROPS/ROPS status and are capable of receiving overseas transfers.
- Together with you and your Financial Advisor you decide on a receiving scheme.
- Once the recommendation has been made and your receiving scheme established TWA shall be advised where to transfer your UK Pension Benefits.
(NB-The Superannuation Fund account must be opened before we can proceed to the next step)
Step Three
- On the receipt of the discharge documentation from the overseas fund, we will provide you with a summary of the retirement projections and benefits forgone.
- On receipt of your acceptance to transfer your funds, we shall send the discharge documentation to the receiving scheme.
- On receipt of the signed documentation from you and the receiving scheme we will send the discharge documentation to your overseas pension provider.
(NB-this can take some weeks for the overseas fund to deal with the release of your funds)
Step Four
- The overseas pension provider releases the funds to your receiving superannuation fund.
- Once the funds have been received, (for those resident in Australia more than 6 months) an Option to Tax form will need to be lodged in order to pay any tax that may be due on your superannuation. For New Zealand this step can be ignored.
- TWA shall raise an invoice for the services carried our on your behalf.
(NB-It can take several weeks for the receiving funds to convert the GBP Sterling to $ AUS)
Step Five
- The balance of the funds are then invested by your financial advisor in accordance with your retirement investment strategy.
A GUIDE TO YOUR DB TRANSFER
One of the main causes for complaints (and why so many financial advisors have had to leave this area of advice) is the accusation that a client “did not understand what they were giving up OR the differences between a DB and a QROPS”…….
That is an accusation we shall not hear from one of our clients, to ensure you make the right decision whether to transfer your DB pension benefits we outline the process is as follows as a guide to help you understand what is involved;
STEP ONE – Mandatory Videos
You watch a series of videos before we begin the formal process.
These videos are very educational and provide a bullet proof audit trail that the client “understands” the basis of the decision they are about to make.
The client receives an e-mail inviting them to login and watch and I receive confirmation when they have done so.
Our client have yet to say that they did not fully appreciate the videos and that the video’s have provided the confidence they are making the right decision to help understand the differences. Those that were lucky enough to be in a DB scheme have been told their whole lives never to give up their DB scheme.
Many after watching the videos have decided to stay with the DB scheme which evidences how well these videos work in helping clients understand what they are potentially giving up by leaving the scheme.
STEP TWO – Email to Client asking for Initial Paperwork
After watching the videos should you decide that you wish to proceed to the next stage of full analysis, I send the following e-mail with the a number of attachments requesting additional personal information;
Thank you for watching the videos and I hope you found them useful to aid in your decision.
Apologies for the length of what is next but our regulator the FCA requires a great deal of analysis before we can provide a DB transfer recommendation especially to a QROPS.
I am going to need the following completed and scanned/e-mailed back at your earliest opportunity.
1. We are going to need certified copies of your passport and a recent utility bill or bank statement to verify your address.
2. Under new Data Protection Law in the EU, we need your signed permission to hold your data. Can you sign the attached Privacy Notice.
3. As you will be coming out of a DB scheme where investment decisions are made for you, even though Simon will be advising you, we need to assess what previous experience you have at making your own investment decisions. Can you please complete the attached Knowledge & Experience Assessment and sign on the last page.
4. We need as much detail about your personal financial situation (including any partner or spouse) to demonstrate you will not be fully dependant on the guaranteed income from the DB scheme. What is also vital to know is the exact date you became Australian resident as this may allow us to transfer your entire fund into your QROPs now. Please give as much detail as you can and sign on the last page. Let me know if you have any questions?
5. The FCA requires us to determine your Attitude to Transfer Risk (how you feel about giving up the guaranteed income from your current scheme). Please complete the attached DB Transfer Questionnaire to evidence this for us.
6. We are going to need a Letter of Authority for each of your schemes so that they can speak to us. Please complete one for each of your pensions and sign.
7. Please expect an e-mail from a company called Finametrica inviting you to complete an Attitude to Risk Questionnaire online. Please complete at your earliest convenience.
8. UK State Pension Projection. As part of our advice, we need to understand how much UK State Pension you are entitled to receive. If your partner or spouse has one we will need this as well. As you live in Australia, there is no way to do this online unfortunately. I attach a link with the telephone numbers to call where you can request this.
https://www.gov.uk/international-pension-centre
Once again I apologise for the length of this information required but you will come to appreciate how thorough we are in our advice which is why we need so much. If you would like a call to go through anything I am available at any time convenient for you.
STEP THREE – Provide Suitability Report and Mandatory Required APTA
We must provide a Suitability Report with the FCA mandatory Appropriate Pension Transfer Advice (APTA). Every suitability report will be bespoke and designed to you.
What is also mandatory in our transfer analysis is for Simon of (TWA) to provide full detail as to what the investment is going to be post transfer and the full cost of this.
STEP FOUR – Creating all the applications and paperwork
There is a great deal of documentation required by the DB Scheme and every ceding scheme trustee will have different requirements that we need to adhere too. We shall create all documentation and e-mail to TWA or directly to you for signing, once you have signed all documentation this should be returned directly to us in the UK, we require the originals of the documentation.
Yes, pension funds from an overseas country for example, Malta, Gibraltar can be transferred to an Australian superannuation fund if you are over the age of 55 and your fund was transferred from the UK prior to 9th March 2017.
Yes, if you are over the age of 55 we at TWA can assist with most all pension transfers from the UK to Australian superannuation funds, subject to that receiving fund being a QROPS/ROPS.
Individuals under the age of 55 years are not eligible to transfer their UK Pension Benefits to Australia.
TWA works with licensed advisers so we can advise you on your options for transferring your UK Pension Benefits.
There are major advantages and benefits to be gained by transferring your UK pension to Australia.
Some of these advantages include:
- Tax Free Lump Sums
- Tax Free Pensions
- Continued Growth of your Fund in Retirement
- No Death Duties
- Flexibility & Control
If you are an Australian tax resident and you leave your pension fund in the UK, the Australian Tax Office will tax you:
- On the Annual Growth after 6 Months
- Part of the Lump Sum Payment
- On the Annual Pension
In the event of your death you could lose all or part of your pension to the UK government.
Currently, you can transfer up to $100,000 per annum as non-concessional contributions, or you can bring forward up to two years contributions and transfer $300,000 over with no further contributions for the next 3 years.
Once you turn 65 years or older, you may no longer bring forward contributions and your contributions are limited to $100,000 per annum,subject to you satisfying the “work test”.
We at TWA can structure your fund in the UK allowing you to make partial transfers to Australia ensuring that you do not breach the UK or Australian legislation.
No. We can obtain a state pension forecast on your behalf and summarise your entitlements from the UK government upon your retirement. You may wish to consider making top up contributions to maximise these entitlements.
Yes, the lump sum payment and the annuity/pension income you will receive may be subject to tax in Australia and taxed at an individual marginal rates of tax.
The ATO allow you 6 months from the date of tax residency to transfer your funds to Australia. Should you transfer your funds to Australia after 6 months you may be taxed on the growth of your fund depending on your circumstances.
You can however elect for the superannuation fund to pay the tax (15%) as opposed to you paying the tax at your marginal rates (32.5%).
You will not be subject to Australian Tax on your UK Pension income. Should you decide to transfer your pension benefits to Australia, from a tax point of view you should in most cases do so before obtaining your permanent residency as this will affect your tax position.
It may be possible to transfer your pension to the UK depending on your current visa and on the conditions of the QROPS/ROPS. However in certain cases there may be a departing tax charge of 65% with effect from 1 July 2017.
Alternatively you can leave your Superannuation in Australia. However, this does not apply to Self Managed Superannuation Funds.
(Professional financial & tax advice is recommended when making this decision)
In the event of death, your superannuation fund would be paid to your nominated benefici¬aries either as a lump sum or pension. The fund maintains its original value and 100% could be paid to your nominated dependant(s). On disablement your superannuation can either be paid to you as a pension or lump sum and is tax free.
There are no death duties in Australia. However certain payments to Non Death Benefit Dependants would be subject to tax at 15% or 30%.
The ATO has also released other updated superannuation rates and thresholds for the 2018/2019 year.
You can find the following rates and thresholds:
- Concessional contributions cap
- Non-concessional contributions cap
Concessional contributions cap
<
| Income year | |
|---|---|
| 2018/2019 | $25,000 |
A single concessional cap of $25,000 applies for all age groups. For earlier financial years however, a higher cap applied to older Australians.
Non-concessional contributions cap
| Income year | Cap | Bring-forward rule |
|---|---|---|
| 2018/2019 | $100,000* | $300,000* |
*An individual can only make non-concessional contributions if their total superannuation balance is less than $1.6 million. There are added restrictions that may affect your eligability.
Start the process today
To enable us to start the process please click on the link below and download the form, once completed please email the forms to us;
- New Client Data – Initial Enquiry 208.77 kB – Information required for us to assist you with the transfer of your UK pension.
- Letter of Authority 198.69 kB – If applicable, this will allow us to obtain relevant information on your behalf from your pension company in the UK.
- Terms of Business 165.37 kB – This will confirm our appointment as your advisor.
- Financial Services Guide 165.37 kB – describes our financial planning and advisory services to assist you to decide whether to use our services. It describes how we are remunerated, our professional indemnity insurance and how we handle any complaints you may have.
Any Questions?
Simply call and arrange a no obligation consultation with one of our TWA specialist to discuss your individual circumstances and work through the benefits of transferring your pension today.
Alternatively, complete the online enquiry form and we will get in touch with you within 48 hours.
UK
Income Tax Bands – 2019 -2020
| Basic rate | Higher rate | Additional rate |
|---|---|---|
| £0-37,500 | £37,501-150,000 | Over £150,000 |
Income tax rates – 2019-20
| Main rates3 | |
| Basic rate | 20% |
| Higher rate | 40% |
| Additional rate | 45% |
| Savings rates4 | |
| Starting rate for savings | 0% |
| Savings basic rate | 20% |
| Savings higher rate | 40% |
| Savings additional rate | 45% |
| Dividend rates5 | |
| Dividend ordinary rate – for dividends otherwise taxable at the basic rate | 7.5% |
| Dividend upper rate – for dividends otherwise taxable at the higher rate | 32.5% |
| Dividend additional rate – for dividends otherwise taxable at the additional rate | 38.1% |
| Default rates6 | |
| Default basic rate | 20% |
| Default higher rate | 40% |
| Default additional rate | 45% |
Income tax personal allowances
| Personal allowance | £12,500 |
| Income limit for personal allowance | £100,000 |
| Income limit for Married couple’s allowance | £28,000 |
| Marriage allowance | |
| Marriage allowance | £1,150 |
Australia
Residents
The following rates apply to individuals who are Australian residents for tax purposes.
The following rates for 2018–19 apply from 1 July 2018.
| Taxable income | Tax on this income |
|---|---|
| 0 – $18,200 | Nil |
| $18,201 – $37,000 | 19c for each $1 over $18,200 |
| $37,001 – $90,000 | $3,572 plus 32.5c for each $1 over $37,000 |
| $90,001 – $180,000 | $20,797 plus 37c for each $1 over $90,000 |
| $180,001 and over | $54,097 plus 45c for each $1 over $180,000 |
The above rates do not include the Medicare levy of 2%.
