Andrew from Vista Financial

IMPORTANT - UK Pension Transfers Post 6 April 15

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    Good afternoon.



    In order for a person to transfer a UK pension to Australia and to avoid incurring up to a 55% tax charge a person must transfer their UK Pension to an Australian Super Fund that is QROPS registered (now known as ROPS -Recognised Overseas Pension Scheme).


    Effective 6 April 2015 a change in UK law (announced in the 2014 Budget and separate to the change in law detailed below) meant that persons with un-funded government pension schemes such as NHS and Teachers Pensions would no longer have the option to transfer these pensions after this date.


    Accordingly there was an influx of people looking to ensure they could secure their transfer prior to this date (to secure the transfer signed transfer paperwork had to be received by the UK Pension provider prior to 6 April 15) resulting in a much higher number of transfers taking place than usual.


    In addition to the legislation regarding the ban on transferring certain government pensions further legislation also came into effect on 6 April 2015 which effectively meant that all Australian ROPS funds would potentially be non-compliant.


    The new rules being that UK Pension monies should not be able to be accessed prior to age 55 (except under the UK ill health definition) which due to certain situations in Australia although rare whereby people are potentially able to access monies before age 55 (ie financial hardship) meant that Australia did not comply with the new requirements.


    Most (ROPS) Super Funds were not fully aware of the magnitude of these changes until they received a letter sent by HMRC dated 17 April and received around the beginning of May informing them that they had until the 17 June essentially to confirm compliance with the new requirements which in turn meant that they retain ROPS status.


    Following realisation by Super Funds that upon receipt of the letter they were potentially non-compliant many stopped receiving payments and in any event many UK pension providers on the advice of HMRC had stopped making payments at this time anyway.


    I posted this thread at the time.



    We are aware that some Superannuation Funds went about amending their Trust Deeds to reflect the UK changes so that they believe they still comply and others have done nothing and instead have lobbied the Australian Law Council and the Association of Superannuation Funds of Australia (ASFA) who are urgently looking to arrange a meeting with Treasury (who have already been in talks with HMRC) to discuss the best approach for the future.


    The potential issues are around transfers received by Australian Super Funds between 6 April and 17 June 2015. The real issue is whether these funds continued to have ROPS status at the time these funds were received and if indeed it is decided that these funds did not have ROPS status at this time whether these payments received will attract tax penalties.


    HMRC publish a list of ROPS schemes twice a month and they temporarily suspended the list on the 17 June:


    The new list is due out today and will hopefully list the Super Funds that have remained compliant although we will have to wait and see.


    It seems HMRC has advised the Treasury, that they may consider relief for transfers completed after 6 April (although at present only to 17 April, which was the date that the letter was sent to QROPS funds advising of the changes) however this has not yet been confirmed as far as I am aware.


    I believe if this is the case then in all fairness the relief should go through to when the letters were reasonably expected to be received in Australia not generated at the very least.


    HMRC advised the Treasury that it does not have any compliance or integrity concerns in regards to Australian funds. It claimed that the purpose of the new rules was to set a simple test of equivalence with the UK rules.


    At this stage of course it makes sense for anyone in the process of transferring to hold off pending clarity around how this will play out and for those that have had a hold placed on funds waiting to come over ie NHS Pensions a change of Australian Super Fund may be required if the original Australian Scheme no longer retains ROPS status.


    We will try to keep members abreast of all updates as they come through but as you can see a lot of information is unclear at this time and I think it best to wait for the facts before speculating on outcomes.


    We will be happy to receive PM's for members who are concerned about the above.



    Kind regards




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    HMRC have just published the 1 July ROPS:


    Rather disappointingly it shows only 1 Australian Scheme.


    Clearly it would appear that Australian Schemes are being considered more thoroughly (perhaps on the back of the Australian Law Council writing to HMRC to advise that no fund was compliant in it's current format) although we know of a number of Super Funds who have advised that they have amended trust deeds to reflect the changes.


    It seems that this will perhaps be a long road, I personally am trying to liaise with the appropriate authorities and Super Funds (who I am sure will be just as disappointed that this has not progressed any further forward) to source additional information which I will post on as soon as I hear back.

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    So following on from yesterday’s developments I have had overnight email exchanges directly with HMRC who advised that the reason there are no Australian Funds listed on the new ROPS Register is that HMRC believe that the certain conditions that allow early release of retirement monies pre age 55 years (therefore not in compliance with the new HMRC Rulings) are actually a legal requirement and not at the discretion of the individual Super Fund.


    As such their current view is that an amended to an individual Super Fund’s Trust Deed will therefore not be sufficient to eliminate the obligation on a Super Fund to release monies early to a person if they fulfil the requirements of any of the early release categories.


    However it seems at this stage that there may be some confusion in this area. Some of the big Super Funds that have actually amended their Trust Deeds to restrict person’s with transferred UK Pension monies accessing these monies other than at retirement or under HMRC’s definition of ill-health (in order to comply with the new Rulings) have taken in depth legal advice regarding this.


    I would very much hope that the Legal Teams involved would have considered this area in great detail before advising an amended to a Trust Deed. Also I myself have consulted with a renowned UK and Australian qualified Barrister who specialises in this area and having advised him of developments yesterday evening he has spent half the night reviewing this area again.


    He has advised me this morning that he still believes that allowing a person to access their monies pre age 55 years is in fact at the discretion of the individual Super Fund and is not in fact a mandatory law.

    Accordingly the amendment of a Trust Deed should therefore (if this is the case) be sufficient to restrict early access to monies for persons with UK Pension Transferred monies.


    Clearly the next step is for the Super Funds that have in fact amended their Trust Deeds (as not all of them have and those that haven’t will clearly not comply with the new requirements and are likely to no longer be ROPS registered) to liaise with HMRC to resolve this issue and if indeed a Trust Deed is sufficient then HMRC will need to then include these Australian Super Funds on the ROPS Register and allow them to maintain their ROPS Status.


    Again as always however nothing is simple so I will keep you posted as to developments.

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    This seems to suggest HMRC are now considering relief on tax for transfers received up to 17 June (17 July published in article I believe this is a typo):


    Click Here


    So what do HMRC recognise as the transfer date.. the date the cheque was sent from UK pension, the date it was paid into the Aus Super Account? Or another date?


    And if the monies are in a holding account held by the Super is that still counted as transferred?

    Edited by beebul

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    Just a bit of an update:


    Obviously there are two issues to contend with here:


    Firstly that of a potential tax charge for post 6 April transfers (to non QROPS schemes), as mentioned previously it has been suggested that HMRC are considering relief although this is still to be fully confirmed.


    Secondly, in relation to UK Pension Transfers to Australia going forward.


    I am aware that there are still a number of big Australian Super Funds continuing discussions with Treasury as still believe that the amendments they have made to their Trust Deeds should be sufficient to meet the UK legislation changes regards the 'Pensions Age Test' and this is still ongoing.


    However in the meantime I am also aware that a test case application to HMRC for QROPS status is in motion for a Superannuation Fund open only to members age 55+.


    This of course would cover off the 'Pensions Age Test' being that no member under age 55 can access monies other than the ill health definition.


    If this is successful then at least it creates an avenue for Pensions to get to Australia in time for retirement (which is essentially the purpose of transferring in the first instance).


    I will keep you posted.









    p.s BeeBul's question was answered over the telephone.

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    We are aware that the NHS are sending letters to people who have requested a pension transfer pre April 6 15 and are pending payment that the transfer will now be cancelled due the requested transfer to scheme not being on the ROPS list.


    There is unfortunately not a great deal that can be done about this at this stage and as said we would very much hope a future solution for Australia will occur, if it is sooner rather than later then I believe there will be grounds to object to this cancellation.

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    Recent update:


    The Association of Superannuation Funds of Australia (ASFA) provided the following update on 2 September 2015:


    “Treasury has advised that it sent a proposal to Her Majesty’s Revenue and Customs (HMRC) with respect to Qualifying Recognised Overseas Pension Schemes (QROPS) on 30 July 2015. Among other matters, Treasury has sought agreement that Australian superannuation funds will be able to apply to HMRC for relief in relation to post-6 April 2015 transfers from the United Kingdom.


    Treasury followed up HMRC with an email on 13 August 2015.


    According to Treasury, the only communication received from HMRC to-date is that they are currently considering Treasury's proposal—that is, HMRC is yet to respond on any of the specifics of Treasury's proposal.


    ASFA will continue to update members regarding this matter, including advising as soon as we hear from Treasury that they have received a response from HMRC.”

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    Her Majesty’s Revenue and Customs (HMRC) have responded to Treasury following submission from them regarding the situation with UK Pension Transfers although have requested further information from Treasury.


    I spoke directly with Treasury this morning and from the conversation I had with them it does seem as though HMRC are willing to firstly consider relief for transfers between 6 April 2015 to 1 July 2015 although at this stage wish to only consider on a case by case basis rather than as a whole which is I believe is what Treasury had requested.

    Secondly in relation to transfers from the UK to Australia going forward it seems that they are open to allowing Super Funds receive Recognised Overseas Pension Scheme (ROPS) status again but the finer details do need to be ironed out (one area of concern for them is the refund of non-concessional contributions condition of release), if it is possible it seems that this would mean the Super Fund would have to create a ROPS members only fund and that the money would not be able to be mixed with Australian monies.


    So of course further discussions will continue and it could take several months for a workable solution (outside of over age 55 SMSFs which already exists) to present itself, hopefully an answer on tax relief will come sooner rather than later.


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    OK ,so notwithstanding the issue of transferring Superannuation from the UK:


    what is the situation with claiming a (part) Age Pension from the UK for years spent working there before emigrating to Oz?


    John B :swoon:

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    Treasury has been engaging with Her Majesty’s Revenue and Customs (HMRC) in the United Kingdom with respect to relief for members affected by the rule changes for Qualifying Recognised Overseas Pension Schemes (QROPS), which came into effect from 6 April 2015. Treasury has now announced the response from HMRC, which advises that:


    The decisions will be made on a case by case basis.


    The Commissioners are likely to concentrate on when the trustee of a QROPS, who was meeting the undertakings it had provided, would have been aware that it should no longer have been accepting transfers of UK tax-relieved funds


    The information that HMRC will need from the trustees of the superannuation funds for each individual who received a transfer from 6 April onwards is:



    • name
    • date of birth
    • National Insurance Number
    • principal residential address
    • date transfer received by the superannuation fund
    • the nature of the transfer
    • the amount of the transfer.



    The transfers should be split into two categories:



    • where the transfer was initiated and agreed prior to 6 April 2015, and the money was received by the superannuation fund on or after 6 April 2015 but before receipt of the letter dated 17 April from HMRC about the Pension Age Test





    • where the transfer was initiated and agreed prior to 6 April 2015, and the money was received by the superannuation fund after receipt of the letter dated 17 April from HMRC about the Pension Age Test.



    Any emails relating to the transfers should:



    • use the subject heading ‘Pension Age Test – Australia’
    • provide contact contact details for the fund




    If anyone falls into any of the above categories then they should contact their Superannuation Fund to ensure that they are providing HMRC with the requested information and assist the Superannuation Fund with information that they may not have.



    If you run your own SMSF then of course it is your responsibility to provide this information to HMRC.

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    Latest QROPS news

    There are now over 50 Australian QROPS Superannuation Funds on the latest ROPS list as of today.


    Of these 5 are government schemes and the rest are I believe all Self-Managed Super Funds (SMSFs) whereby the Trust Deed has been arranged only to permit membership for over 55 year olds.


    Of the 5 government schemes they are either no longer open to new members or only open to certain government employees.


    Therefore as things currently stand the only way to directly transfer a pension from the UK to an Australian QROPS scheme (outside of the above circumstances around government schemes) is if a person is over age 55 and arranges to establish a SMSF and then applies for it to be a QROPS with HMRC.


    If a person over age 55 wishes to go about doing this and requires advice to do so then typically the balance of the fund should be at least $200,000 to make it cost effective.


    Tax relief for post 6 15 transfers

    Regards relief for people who had pensions transferred to Australian schemes post April 6 2015, I understand that HMRC are in receipt of information provided to them by some Super Funds who had received transfers in post 6 April for members and are awaiting a decision as to whether relief will be granted whilst other Super Funds are seeking further clarification about the information that HMRC have requested via Treasury.

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