Often an individual, who is migrating to Australia, will contribute to their UK pension pre-migration – taking advantage of the UK tax relief on contributions – and then they would affect a pension transfer to Australia at a later date in order to take advantage of the Australian QROPS tax benefits in retirement, in Australia.
As is the case on so many occasions, with the cost of migration increasing, most people do not have the spare funds to contribute to a UK pension pre migration – no matter what the tax breaks may be. This results in a UK pension transfer to Australia being completed without maximum advantage taken from UK tax relief.
For an individual already in Australia, whose proposed UK pension transfer to Australia is not underway, there may still be an opportunity to contribute to the UK pension.
If an individual is deemed to be a relevant individual ie has relevant earnings chargeable to UK tax in that tax year, is a crown servant abroad with earnings subject to UK tax (a diplomat or soldier, for example) or has been resident in the UK in that tax year (or any of the previous 5 tax years) – a contribution could be made to an existing UK pension.
Global QROPS Ltd would like to point out, however, even if the pension member is a ‘relevant individual’ it would still depend on the pension member’s provider as to whether the individual could still contribute. If the relevant individual has no UK earnings, the likelihood is that the UK tax relief on contribution would be restricted to £3,600 per annum (should the UK provider allow the contribution).
Pension members, migrating to Australia, should take advice from Global QROPS Ltd before regarding their additional contribution options.
