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Important Changes on QROPS Rules

If you are in the process or planning to transfer your UK pension to Australia, it is important that you stay informed on the latest rule changes on Qualifying Recognised Overseas Pension Scheme (QROPS).

Early in March, Her Majesty’s Revenue and Customs (HMRC) announced that payments made to QROPS may be subject to 25% UK tax. The tax only applies when a transfer is made to a QROPS in one country, where the individual is not a current resident.

If your transfer discharge paperwork has been received in the UK before 8 March 2017 and you are transferring to a QROPS in another country, these changes will not apply to you.

In addition, HMRC also introduced a revised rule on withdrawals from QROPS. With this rule, HMRC will apply tax to any withdrawal for 5 full UK Tax years from the date of the transfer. This rule applies to payments from QROPS where the transfer is received after 5 April 2017. This rule amendment applies to all QROPS schemes in Australia and overseas including SMSFs.

Pension Transfer Specialists (PTS) are working with UK Pension Schemes to ensure compliance with these revised legislations. We are seeking formal guidance on these changes from an international tax specialist and will update this information as soon as possible.

We have several options to transfer which will not incur a tax charge and we would urge you to contact PTS for further details of these options.

If you have more questions or need further clarifications, you can directly contact PTS at pensions@ptspsecialists.com.au or telephone the office at (08) 9233 9269.

Note: This article is not financial planning advice and is for your personal information only.

written by:

McKinley Plowman