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Expat financial advice from the experts

QROPS Australia – Is it the right option for you?

QROPS Australia

If you are planning to move to Australia whether as a retiree or to work then considering what you want to do with your UK pension should be a priority. There are various options available to you depending on what your requirements, position and intentions are. A QROPS Australia is one of these options.

Australian QROPS Background

Since 2015 any transfer from a UK pension to an Australian Superannuation fund has been particularly difficult due to reforms in UK pension legislation. The reason it became so difficult was that the law change closed any transfer to an Australian scheme that allowed access to the pension fund prior to your 55th birthday. In essence, the way this has been resolved is to transfer UK pensions once members are over the age of 55.

Am I eligible to transfer to an Australian QROPS?

When considering a transfer both UK and Australian pension legislation needs to be taken into account. For the UK the focus is on the receiving scheme and a requirement to be over 55 as stated above. For Australia, we can identify 3 key areas that need to be addressed:

  • You must be under 75 years old at the time of transfer
  • Maximum pension balance using non – concessional contribution bring forward rule is AUD $300,000
  • If aged between 65 and 74 You must meet the Australian “work test”

Is an Australian QROPS my only option?

In short, no not at all and often it is not even the best option. A Non-Resident SIPP offers a number of significant advantages whilst allowing you to transfer prior to the age of 55. You will of course still not be able to access any monies until 55 years old.

What is an Non-Resident SIPP?

A Non-Resident SIPP is by all accounts a UK SIPP that has been specifically created for non-residents. You get all the perks of a standard UK pension such as,

  • FCA (Financial Conduct Authority) regulation
  • Tax relief in the UK if wanting to make further contributions or may possibly return in the future
  • Access from age 55 in line with UK pension legislation

Additional benefits include:

  • Flexible investment choice – funds are not limited to a small range of insurance company or UK
  • Hold in multi-currency including AUD $ and AUD $ denominated funds
  • Ability to consolidate existing schemes
  • Low-cost structure

Summary

As with all financial planning, it is important to understand and evaluate every area of your plan to ensure that everything works together in unison. Your pension is a significant part of that plan and should be given due care and attention. Your financial adviser should be suitably qualified with the appropriately experienced to be able to assist.

At Harrison Brook, our team of Financial Advisers is available to support you through your retirement planning and pension transfer. Please don’t hesitate to get in touch and see how we can assist you.

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