Changes to UK pension transfers to Australia
UK law changes may affect pension entitlements transferred from a UK pension scheme to an overseas scheme (including Australia).
From 6 April 2006, if a UK immigrant chooses to transfer their UK pension entitlement to an overseas pension (super) scheme, such as a superannuation scheme in Australia, the overseas scheme must be a Qualified Recognised Overseas Pension Scheme (QROPS).
A QROPS is a scheme that has satisfied certain criteria and made specific undertakings for ongoing responsibilities in relation to UK-originated pension entitlements transferred to the scheme.
If an individual chooses to transfer their UK entitlement to a non-QROPS, both the UK scheme and the individual may be subject to significant tax penalties imposed by the UK Inland Revenue. To avoid these tax penalties, it is now extremely important to ensure the receiving scheme has been acknowledged by the UK authorities as a QROPS before the transfer is processed.
Tags: pension transfers, UK pension