UK Pension Transfers

[Guest Chelseadownunder]

Its a good idea within your early months in Australia to look into transfering you UK Pensions I have copied in some information members may find helpfull. This is general information and should not be taken a personal advise. PM me if you need more info. Steve

 

 

Australian tax treatment of transferred benefits

The Australian tax treatment of the transfer will depend on

whether it occurs within six months of the member becoming an

Australian tax resident, or after this date.

For a permanent migrant, the date of becoming an Australian

tax resident is usually the date of arrival.

Benefits transferred within six months

Where the overseas super benefits are received within six months

of the member becoming an Australian tax resident, the entire

amount transferred is treated as a non-concessional contribution.

No tax will be applied in Australia, however the full amount will

count against the non-concessional cap of $150,000 ($450,000

if the bring-forward provision is available).

 

Benefits transferred outside six months

Where the transfer occurs outside the first six months of the

member becoming an Australian tax resident, the difference

between the value of the overseas benefit as at the date of

becoming an Australian tax resident and the final transfer amount

will become what is referred to as the growth component.

The member has three options for the treatment of this

growth component:

 

1

Include the growth component in their personal assessable

income, which would be taxed at their marginal tax rate. Within

the super fund, the amount transferred would form part of the

 

tax-free component and be counted against the member’s

 

non-concessional cap.

 

2

Elect for the growth component to be included in the assessable

income to the receiving fund, subject to tax at a maximum rate

of 15%. While the growth component is essentially treated as a

 

concessional contribution, the amount is not counted against

 

the member’s concessional contribution cap.

 

 

3

Elect to transfer only part of the growth component to super

and include the rest in their personal assessable income (this is

a combination of the first two points).