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Six questions (and answers) about UK Pension Transfers

If you are a British expat living in New Zealand or a returning Kiwi, transferring your UK Pension with you can offer some key benefits. Here are the most frequently asked questions.
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What’s a QROPS?

QROPS stands for ‘Qualifying Registered Overseas Pension Scheme’. If you want to transfer your UK pension to New Zealand, you can only transfer it to an HMRC approved QROPS (or face a large penalty – possibly up to 40%). Unfortunately, KiwiSaver accounts do not qualify to accept transfers.

What are the tax implications (if any)?

Depending on the circumstances of your transfer, tax charges of 25% could be applied. You don’t usually have to pay tax on transfers to QROPS if your pension scheme was provided by your employer.

Currently, if you are a New Zealand resident and don’t withdraw from your transferred QROPS for at least five tax years, you won’t pay tax on the transfer.

Taxation rules are subject to change at any time, and we recommend you talk to us before making any withdrawals.

At what age can you access the funds?

Currently, you can access your funds once you have reached the minimum UK retirement age of 55. However, the rules are set by the UK HMRC – and therefore could change at any time.

Will you lose any benefits if you transfer?

The answer to this varies, depending on the UK pension scheme you have. Transferring from defined benefit schemes will likely incur a loss of benefits; we recommend you seek specialist legal and tax advice before committing to a transfer.

Talk to us about the scheme you are currently in, and we can help you understand the risks.

What are the costs involved?

As Authorised Financial Advisers, we are required to tell you their fees before you do the transfer. However, apart from your adviser’s fee, there may be transfer fees, entry and exit fees, annual management fees and switch fees.

Fees can add up, so it pays to know exactly what all your costs would be, before you decide to transfer.

Someone cold-called me offering UK Pension Transfers: what should I do?

We recommend you don’t give away any personal information over the phone. If you have any questions about the legitimacy of someone calling, contact us and we can help, or contact the Financial Markets Authority, who can give you information about known scams.

Get in touch with us

Remember: transferring your UK pension should only be done once you are certain you will not be returning to the UK. Otherwise, you may end up losing money and benefits. If you’d like to find out more or want to work out whether a UK pension transfer is the right move for your situation, talk to us – we can help you.

 

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek advice from a financial adviser.

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