UK to Australia Pension Transfers
Australian Superannuation Benefits
On retirement at age 60, in Australia you are able to receive your benefits tax free from your Australia Superannuation Scheme. In addition, there is no requirement to purchase an annuity in Australia allowing flexibility on how the benefits are received.
The ‘Six Month Rule’
Your UK pensions could be affected by Sub-division 305 (formerly known as 27CAA) tax. Commonly referred to as the ’six month rule’, if you transfer your UK pensions to an Australian pension six months after your arrival in Australia, the Australian Tax Office (ATO) would apply a tax on any growth of your UK pension fund, between your arrival date and the day the funds arrive in Australia. This tax could be at your highest marginal rate or at Australian Superannuation scheme rates.
(For certain Australian visa types, the six month rule may not apply to pension transfers.)
Australian Superannuation Limit
There is currently an annual cap on the amount of their own money an individual can contribute to an Australian Superannuation scheme. This annual limit is $150,000. If preferred, an individual can make three years’ worth of contributions ($450,000) in one year – providing no further contributions are made in the subsequent two years. UK to Australia pension transfers are included in this limit and individuals with funds in excess of the cap will need advice as to how to stagger the transfer of funds into Australia.
Any pension funds held outside of Australia, whilst the member is an Australian resident, could be subject to Australian FIF tax – which is paid by the individual on an annual ongoing basis at their highest marginal rate.