There are many reasons to transfer your UK pension with GPT, a 100% tax free retirement is just one of them.
Superior tax effectiveness
In most cases, retirement income will be more tax effective if sourced from an Australian superannuation fund than a UK pension. If you are aged 60 years or more and retired, your pension income will be 100% tax free. If you are aged between 55 and 60 and retired, significant tax concessions apply. If you have no other income there’s no need to lodge an Australian tax return.
Transfer within six months of Australian residency and the Australian Tax Office allows a six month tax free window – your UK pension benefits can be transferred to an Australian superannuation fund without incurring a tax liability on transfer.
If the transfer takes place after six months from the date of permanent Australian residency, as is common, some tax is payable on the growth of the UK fund from the date of residency to the date the transfer takes place. Remember however that only the growth is taxed, not the fund itself.
Unlike the UK, there is no requirement to ever purchase a pension/annuity in Australia. Within the first five years of Australian residency, if you are retired, you can draw up to 25% of the transferred funds as a lump sum 100% tax free under UK rules. If you have been in Australia for more than five years and retired all funds can be withdrawn as a 100% tax free lump sum and any UK restrictions will no longer apply.
Greater control and access
By consolidating and transferring your retirement benefits to Australia, you will have greater local control and access to your funds in the country in which you have chosen to reside and retire.
Superior death benefits
The death benefits payable from Australian superannuation and Account based pension funds comprise 100% of the fund value. Depending on who the beneficiaries are from these benefits may require some lump sum tax to be paid. Payment to spouse will always be tax free.
Elimination of long term currency risk
By transferring your UK pension funds to Australia, you will eliminate the long term currency risk involved in transferring foreign currency to Australia on a regular basis.
Of course, it’s important that you carefully consider your individual circumstances when planning your UK pension transfer. If you are unsure that a transfer is best for you, take advantage of our advice and transfer service. There will be a cost attached but for peace of mind you will be able to make an informed decision.