busso steve Posted January 16, 2017 Report Share Posted January 16, 2017 In May I will hit 65, I am going to defer my UK old age pension as I plan to carry on working for another year. My question is, I also have a Private Pension with a Company I used to work for, in May I could take a Lump Sum UK Tax Free form the Pension in the region of $60,000, can I bring this to Australia, through my Bank, then make the maximum top up payment in this Financial year into my Australian Super, then make a further payment early in the next Financial year. Are there any Australian tax implications Quote Link to comment Share on other sites More sharing options...
Rossmoyne Posted January 16, 2017 Report Share Posted January 16, 2017 I do suggest that you take advice from an Accountant with knowledge of Australian and British tax law as I seem to remember someone else doing this a couple of years back and ending up with a large tax bill. The 60,000GBP will probably be classed as "unearned international income" and as such is subject to income tax in Australia, especially if you are still working. The whole pension situation between UK and Australia can be fraught with seemingly silly stipulations and laws, so please make sure you have good advice before you make a decision on what to do. There have been similar threads posted on our sister site, PomsinOz, so it might be worth your while joining that forum and looking through the threads. Quote Link to comment Share on other sites More sharing options...
Andrew Williams Posted January 17, 2017 Report Share Posted January 17, 2017 Hi Steve Is this a defined benefit or defined contribution scheme? If you are a permanent resident then there will be an assessment on the lump sum for Australian tax. The type of pension ie question above as well as the growth of the fund since you have lived here will play a part in determining the liability. Again depending on the type of scheme there may be further tax implications in Australia in relation to how you access the remaining 75%. It is now possible to transfer a pension directly to Australia for over age 55s the type of pension you have along with the above tax implications would be used in ascertaining whether this option might be beneficial. Just an overview of super (if it is transferred and assuming you are a permanent resident) at age 65 up to 100% can be accessed tax-free (although there may be some tax to pay on transfer in). Happy to chat further if required. Regards Andy Quote Link to comment Share on other sites More sharing options...
busso steve Posted January 17, 2017 Author Report Share Posted January 17, 2017 Hi Andy Thanks for reply and info, in answer to the questions you ask The scheme is Defined Benefit, we were Permanent Residents from the moment we landed in Australia on a Contributory Parent Visa September 2011, we are now Citizens In a Statement I have found, my Pension had a CEV ( Cash Equivalent Value ) of $158000.00 in May 2010 I have no CEV at moment, but Pension could be either All Pension at $13,000.00 per year or UK Tax Free Lump Sum of $61,406.00 plus Pension of $9,211.00 per year I am under the impression that at the moment you can only transfer Pension Funds into Self Managed Pension Scheme, as QUORPS no longer available and think I have big enough fund to make this worthwile Quote Link to comment Share on other sites More sharing options...
Andrew Williams Posted January 18, 2017 Report Share Posted January 18, 2017 Hi Steve Thanks for this. Typically when recommending setting up a SMSF $250,000 would seem to be the justified balance although when someone is so close to income drawdown this amount would tend to be a fair bit higher. Also given what is involved in the transfer process and setting up a SMSF from scratch as well as having it obtain QROPS status it would be very tight for you IF a transfer is to occur. I do now have an alternative solution/option for transferring pensions that does not involve having to use a SMSF (although I still use SMSFs in cases I think are warranted). If you wish to make contact feel free to PM or email Andrew@vistafs.com.au and I will explain our process and fees involved. Kind regards Andy Quote Link to comment Share on other sites More sharing options...
Andrew Williams Posted January 19, 2017 Report Share Posted January 19, 2017 Hi Steve Sorry just to add a couple of points. Tax on lump sum - Typically when from a defined benefit scheme is taxed on the growth (and just the growth of the lump sum not the whole fund unlike defined contribution schemes) at a person's MTR. Tax on income - Typically when from a defined benefit scheme assessed at a person's MTR. Timing - The reason you are up against it from a timing point of view is that from 1 July 2017 you will not be able to contribute more than $100,000 to Super due to both age and contribution limits. Hope this clarifies things. Regards Andy Quote Link to comment Share on other sites More sharing options...
busso steve Posted January 19, 2017 Author Report Share Posted January 19, 2017 Thanks Andy Quote Link to comment Share on other sites More sharing options...
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