The Latest Changes Affecting Transfer Of UK Pension To Australia

Following massive changes that have hit the pension transfer market in the recent years, it’s not easy to transfer UK pension to Australia. Therefore, you need the help of an Australian-based Qualified Recognized Overseas Pension Scheme (QROPS) specialist. The biggest concern for most pensioners relocating to Australia is the cost attached to the transfer of their UK pension, especially the taxes of up to 25%. The two governments have adjusted their regulations pertaining to retirement benefits transfer. As a retiree in the UK who is planning to settle in Australia soon, you have to familiarize yourself with the latest changes. The changes include the following:

Age Limit

With respect to the UK, the age limit for anyone interested in making a pension transfer from the UK to Australia is 55 years. The changes were enforced in 2015, and have stayed like that ever since. Pensioners in the UK who haven’t reached 55 years are advised to wait before they can transfer their earnings to Australia.

HMRC and SMSFs Regulations

Apparently, your super fund in Australia can only receive your UK pension if it’s registered with Her Majesty’s Revenues and Customs (HMRC), a pension regulator in the United Kingdom. The super fund has to be legally registered with the UK HMRC as a QROPS. The exemptions are the Self-Managed Super Funders (SMSFs). Provided that you are 55 years or more, and you comply with the SMSF regulations, you can make the transfer. Normally, you are given an SMSF deed that observes the UK pension transfer regulations. After this, you are expected to request HMRC to register your SMSF scheme as a QROPS. You can make the request online.

AESF Regulations

Other than the SMSF route, you can use the Australian Expatriate Super Fund (AESF) route. AESF is very new and it allows you to transfer UK pension to Australia fast. To transfer pension by AESF, you’ll be charged $880. Once the money arrives in your Australian account, its treated as ordinary superannuation.

Final Thoughts

The primary driver for most people who are transferring their UK pensions to Australia is consolidating finances in one country and reducing potential administrative burden. To get the most out of the transfer process, all you need to do is keep the costs down, especially looking at the latest changes affecting pension transfer from Britain to Australia. With a QROPS, SMSF or AESF scheme, you can safely transfer your retirement benefits to Australia. You need to compare the charges for all the possible routes and determine one that is convenient for you.