For UK migrants looking to live and retire in Australia, looking at UK pension transfers to Australia has changed since 1st July 2007 when new restrictions, imposed by the Australian Tax Office (ATO) came into effect.
What were these changes and what effect did they have on UK pension transfers to Australia?
By way of background, in May 2006, the Australian Budget included an announcement to the end of the Reasonable Benefit Limits (RBL), which was basically a limit on how much an individual could take completely tax free from their Australian superannuation scheme. As a result the Australian government introduced a cap on how much an individual could contribute as a contribution, made from the individual taxpayer’s income after tax. These contributions are known as non-concesssional contributions.
The limit was, from 1st July 2007, $150K per annum (or $450K every 3 years).
Included in these contribution limits were transfers in from overseas pensions. This had an immediate effect on UK pension transfers to Australia where the UK pension member had in access of the Australian limit within their pension.
Global QROPS Ltd offer advice on the options for an individual who has in excess of the limit. Can an individual partially transfer from their existing UK scheme? Are there alternatives to using an Australian QROPS? These are amongst the important considerations for someone to address before leaving the UK.