UK Pension Transfers

Under new regulation effective from 1st July 2011, Investment related products have been classified as Category 1 products and any advice sought can only be from an Authorised Financial Adviser.    At Canterbury Financial Services Limited, Mark O'Donnell is our Authorised Financial Adviser, and he is able to give you advice on these and other financial products.  Mark's disclosure statement is available on request and free of charge, and a link to this is also provided at the bottom of this page.
    

On offer is sound advice, coupled with professional service and administration support.    For 13 years we have been transferring UK Pension Schemes to Qualifying Recognised Overseas Pension Schemes (QROPS) under UK Legislation.

The Qualifying Schemes have UK Cash Accounts which are effective in eliminating the exchange rate risk when transferring your Pension from UK to New Zealand.   This allows you time to consider the appropriate time to convert your £ Sterling to New Zealand dollars.

 

Why Transfer?

Control 

Once you have made a decision that New Zealand is going to be your home, it makes sense to take control of your UK Pension and transfer to enable a more hands-on approach to your future savings and have access to advice.

There are a number of reasons we believe transferring UK Pension Schemes to New Zealand outweighs leaving your Pension with UK Administrators.

Flexibility 

In New Zealand there is no requirement to purchase a Pension or Annuity.  I have found that our UK clients enjoy the freedom to tailor their plans offering more flexibility.  Eligible transfer may be able to access up to 40% of the value immediately.

Tax Effective

Should you retain the Funds in a UK Pension, then any income from your pension from UK would be assessable as income and taxed at the marginal income tax rate applicable at the time.  Once transferred to your New Zealand Scheme and eligible, your drawdown of capital would not be considered taxable income and would not be assessable for income tax.

 

Facts

  • If you die with a UK Pension Scheme, your spouse may only receive up to half to two-thirds of the Pension you would normally have enjoyed.
  • If you both died, the Pension and all the funds would be left to the Trustee who use those funds to help secure the longer-term benefits for other pension holders.  Your Estate may get nothing.
  • Certain UK Pension Plans allow for qualifying children to be named as dependent children, in which case should you both die early, your children could be eligible for a pension payment, relative to the criteria of the Plan.  This is normally laid out in your Pension Plan documentation.
  • Once the funds are in a New Zealand Qualifying Scheme, should you die, or both die, the remaining funds are unaffected and continue on to form part of your Estate and are passed on to your children or heirs, as per the instructions of your Will or a Trust.

 

Notes:  

Care needs to be taken as to the type of Fund that you transfer your funds to in New Zealand, as if they are a non-registered Fund in New Zealand, a UK tax of 55% could be imposed on the Funds transferred.

If you are already eligible for the benefits from your UK Scheme, you cannot transfer.

There are a significant number of other technical issues to be aware of and each individual needs to asses the suitability of the transfer of their Pension fund to their circumstances.  Experienced advice is essential so please Contact Us.

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