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 ‘6 Month Rule’

Your UK pensions could be effected by Sub-division 305 (formerly known as 27CAA) tax. Commonly referred to as the ’6 month rule’, if you are looking to transfer your UK pensions to an Australian pension 6 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 those entering Australia on certain visa types, the 6 month rule may not apply to their UK to Australia pension transfer).

Australian Superannuation Limit

There is currently an annual cap on how much an individual can contribute, with their own money, to an Australian Superannuation scheme. This limit is $150,000 per annum or, if preferred, an individual can make 3 years worth of contributions ($450,000) in one year – providing no further contributions are made in the subsequent 2 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 funds into Australia.

FIF

Any pension funds held outside of Australia, whilst the member is 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.