British expats and Kiwis who’ve left their personal pension back in the UK are being advised to transfer it before Brexit kicks in.
The advice is aimed not just at UK expats already living in New Zealand, but also to those planning to emigrate in the near future.
It’s being spurred by increasing concern over the viability of company pensions following the Carillon collapse and the precarious state of many other large pension companies, as well as by the unpredictability of the Brexit effect on taxation of personal pension transfers.
As regards British expat already settled in New Zealand, the recent introduction of a 25 per cent exit tax on pension transfers to products such as QROPS doesn’t apply, but financial experts believe once Brexit is a done deal different taxes will be brought in to cover British pension holders no longer in the UK.
The government, as usual, sees pensions as an easy target for tax revenue, and is preparing to aggressively target non-resident citizens. Reasons for such a move include the specific design of pensions as regards tax relief, which result in an eventual return to the government of tax revenues. Upcoming changes are expected to hit hard on expats as a form of punishment for not putting the tax due back into the Treasury coffers because a transfer of a personal pension robs the UK Govt of their expected tax take.
To avoid any eventual tax grab, the first step is to understand if a transfer of your UK pension is a good idea and in your long-term financial interests. Once you have an understanding of your pension value as a transfer and any tax implications in New Zealand you can go about selecting the correct New Zealand superannuation scheme and selecting the funds available for investing UK pension in here.
Our expert consultants take the pain out of what can be an exhausting and complex process whilst ensuring you make the right decision and avoid the myriad of pitfalls associated with a pension transfer.