On 6 April 2023 the UK removed the Lifetime Allowance Charge. This meant that any transfer from a UK pension to New Zealand, whilst still being assessed against the lifetime allowance, no longer had any tax if the amount transferred was above the lifetime allowance. The charge, when no protection was available, was 25% of any amount above GBP1,073,000 prior to 6 April 2023.
As of December 18, 2023, the UK tax authorities are now seeking to plug this hole with the introduction of the Overseas Transfer Allowance. The proposed legislation will introduce a 25% charge for any transfer above GBP1,073,000 (the amount of the Overseas Transfer Allowance). It is proposed that this charge and allowance will start effective 6 April 2024.
If you wish to take advantage of this temporary exemption you will need to act quickly to get your UK pension to New Zealand before 6 April 2024.
