Pension transfer tax

 
 

There is now a 25% pension transfer tax payable in the UK

Following UK rule changes on 9 March 2017 there is now a 25% tax charge payable if you transfer to a country you are not tax resident in e.g. you live in Australia and you transfer to New Zealand. The tax charge is paid from your UK pension before your UK scheme make the transfer. Whilst the tax charge may seem punitive it is important to understand the actual long term effects of the tax charge weighed against the other significant tax benefits of a transfer to New Zealand for and Australian tax resident.
 
 

Other than the OTC there is no pension transfer tax payable in New Zealand

The New Zealand government introduced a new system of taxation on the transfer of foreign pensions to New Zealand in April 2014. This system allows people a four year window from when they become a resident in New Zealand to transfer their foreign pensions to New Zealand tax free. This legislation compares favourably to the Australian regulations that only allow a six month tax free transfer window.
 
However, if you are not living in New Zealand you can join a New Zealand QROPS and transfer your foreign pensions to New Zealand pension transfer tax free. So if you are living in Australia and are seeking to transfer your pension to New Zealand there will not be any tax payable in New Zealand on the transfer.
 
Furthermore, unlike Australia, there is no limit on the amount that can be transferred to New Zealand tax free. There are no concessional caps in New Zealand meaning that provided you are not breaching the life-time allowance limits in the UK you can transfer as much as you like tax free.
 
These are considerable differences when compared to the Australian tax system which would tax you up to 15% of the growth in the scheme since you arrived in Australia (if you do not transfer within the first six months of arriving in Australia), as well as any concessional limit caps that might be broken when transferring.
 
 
 
Disclaimer: We are not tax experts and the above represents our understanding of the current tax rules. It is not a substitute for tax advice and any reliance taken is at the risk of the reader.

NZ free phone:0800 102 599 / OZ Free Phone:1800 857 410 / Email:info@qropsnz.com

very stress free

Thank you Cambel for your help and guidance throughout this process in getting my pension transferred (very stress free for me). It is greatly appreciated and I would certainly recommend you and Charter Square to others who are interested in transferring their pension.

David R, New Zealand

You guys rock!

I just wanted to say a great big thank you to you and your team. You are all totally awesome. I received a cheque yesterday from the Prudential to apologise for the ‘recent inconvenience’ that I had experienced. Thank you for doing this for me. You guys rock!

Noelle B, New Zealand

professional, insightful

Charter Square were professional, insightful and a pleasure to work with. They rose to the challenge of consolidating my overseas pensions and bringing them home with minimum fuss for me and maximum effort on their part.

Jens H, New Zealand

thorough, professional and prompt

Very thorough, professional and prompt service from the team at Charter Square. Thanks for making the bewildering world of pension transfers super simple.

Jules T, New Zealand

Best party to deal with

Thank you kindly for keeping in touch with me. For now, I will not be moving my pension. I will however be keeping your details and referring back to you when I wish to pursue. You by far are the best party to deal with, no nonsense, professional and in my opinion genuine. I do sincerely thank you for your advice to date.

GE, New Zealand

Freedom

Securing the freedom to use savings that are actually ours to work with has been stressful in the extreme. While I never planned on giving up there were many times when the current (UK) holder made the whole process seem well beyond my determination and ability. It’s easy to look at the 36 month history of this claim with the benefit of hindsight, but the conclusion is that employing Charter Square in the first instance would have been wise had I been able to anticipate the red-tape that appears to have been deliberately created to stall access.

CP, Auckland
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