Are you looking to move and ultimately retire to Australia? Do you want to get away from the vagaries of the European weather and retire in style, warmth and enjoy a barbeque?! To help you enjoy your well earned retirement have you thought about the benefits of transferring your pension into an UK Government approved QROPS, or Qualifying Recognised Overseas Pension Scheme?

Many of the 25,000 expatriates that have relocated to Australia have taken advantage of transferring their pension to a tax efficient jurisdiction such as Malta, the Isle of Man or Gibralter.

You can also transfer your pension into a pension scheme in Australia which will help;

  • Pay less inheritance tax
  • Pay less tax on the benefits of your pension
  • Not be exposed to currency fluctuations

There are almost 1000 different QROPS schemes which are approved by the UK’s HMRC held in Australia. If you are looking to move, live or retire to Australia in the future and hold a UK pension there could be significant benefit in transferring your pension into a Australian QROPS scheme.

It is critical when you are looking at which QROPS scheme to join that you go with an authorized scheme – http://www.hmrc.gov.uk/PENSIONSCHEMES/qrops.pdf – and that you use a qualified financial adviser with experience in pension transfer, in particular to Australia.

There are many benefits involved with transferring your pension to Australia, including;

  • Paying only 15% tax on pension benefits (you can pay up to 50% tax in the UK)
  • No currency fluctuation risk
  • No inheritance tax is incurred in Australia – in the UK you’ll pay up to 55%

We would recommend that before you decide to transfer your pension you discuss it with a qualified financial advisor as it may be advantageous to move it into another jurisdiction where you will pay even less tax.

One of the disadvantages of transferring your pension into a QROPS in Australia is also that you can only transfer AUS $150,000 per year or a lump sum 3 year figure of AUS $450,000 into a fund in Australia. Meanwhile you could transfer 100% of your pension into another jurisdiction in one transfer.

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