Claiming your UK pension in Australia

February 5, 2018 Pensions

Many British expats flock to Australia in retirement, due to its lifestyle, culture, and the English language.

A large portion of expats take their pension with them, by transferring any personal pensions to an Australian scheme. This leads to tax advantages, freedom of choice, and the consolidation of your assets into one portfolio.

There have been many changes to the rules regarding UK pension transfers to Australia in the last few years. The tightening of these rules has made finding an Australian scheme that meets the UK’s criteria harder, however, it is still possible.

Once a suitable scheme has been found, there are multiple criteria that must be met.

To avoid a 25% overseas transfer tax, you must be tax resident in Australia for five years after the transfer. In addition to this, you must not have started drawing down the pension, and you must be over the age of 55.

After the 1st July 2017, there is now a yearly cap of $100,000 per annum. Also, the lifetime contribution limit is now $1.6 million, over which you will not be able to make any further non-concessional contributions.

The constantly evolving regulations on moving a British pension to Australia make the process complex, time consuming, and a potential tax nightmare.

Seeking advice from a qualified advisor ensures that you’re making the right move and that you are aware of all options available to you.

Here at Credence, our advisors are well-versed with the regulations surrounding pension transfers and can provide you with options that are the most tax efficient. If you’re living in Australia and would like to learn more about what to do with your UK pension, do not hesitate to get in touch.

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