Aussie rules

By THIS IS MONEY
Updated:

 

I EMIGRATED to Australia five years ago and want to transfer my nine-year British army pension funds and seven-year NHS pension funds to an Australian pension fund. What is the tax liability? SG, London

Lee Robertson, independent financial adviser at Investment Quorum, says: Both of these pension schemes are statutory pension schemes backed by the UK Government.

They provide defined benefits in retirement based upon the length of service for the respective UK employers. This means that you can predict with absolute certainty the level of income you will receive in retirement. This is a very valuable benefit in these times of uncertain investment returns. So it is unlikely that a transfer to an Australian scheme will be as valuable or carry no risk, both in terms of investment and default.

You should apply to have your payments from these pensions paid gross in the UK and the monies remitted to Australia where you would have to sort out any tax liability locally.

Should you actually transfer to an Australian scheme the UK Inland Revenue would need to approve the receiving pension scheme as suitable.

I suggest that you take taxation and pension advice from appropriate advisers as I am not convinced that your suggested course of action is suitable or wise.

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