Hello

Would anyone please be able to advise us regarding tax liability of not transferring final salary company pensions to Aus. I have read on another forum that these schemes are exempt from the 15% tax on growth if left in the UK. I have 19 years in my fund and would be inclined not to transfer if this was the case as these schemes have quite good benefits. Grateful for any info.
Cheers
Lee

Check out this web site. If you leave your pension in the UK and take the pension when you retire you will be taxed on the pension you receive in Australia which could be at the higher rates dependant on the amount of your pension. If you are not yet aware the UK tax office is introducing new regulations regarding transfers of pensions which is covered elsewhere in the forums.


http://advance.com.au/resources/afm/downloads/Technical/tfr_os_super.pdf

Thanks for the reply Paddy. Will check out that website.

Cheers
Lee

You should also be aware that the lump sum that is generally available from a UK pension fund at retirement age and that is tax free in the UK may well not be tax free in Australia under the provisions of section 27CAA of Australia's Income Tax Assessment Act 1936 - this aspect is rarely mentioned by Australian superannuation fund providers.

So long as one recognises there may be a tax liability in the event that you receive a lump sum from a pension fund located outside Australia when you are a tax resident of Australia I would generally be of the view that one should stick with membership of a final salary scheme.

This said there are other factors to consider, including currency risk and the ability to pass on fund value/benefits to a surviving spouse or partner - these may be better within an Australian super fund.

In short, I think one has to take paid for professional advice because your situation will be specific to you.

Best regards.