OVER 55 QROPS TRANSFERS

Over the last few years, the rules around UK pension transfers have continued to change. These changes have increased complexity and today pension transfers can no longer be treated as an isolated transaction. Getting the process wrong can be costly and time-consuming.

It’s essential you have the right advisers (in the UK and Australia) to help you navigate the process. Transferring your funds to a non-compliant overseas fund structure or transferring into an offshore fund when you do not reside in the same country could result in a penalty tax by Her Majesty’s Revenue and Customs (HMRC) of up to 55% of the value of the transfer.

Below we explore some of the key issues and considerations of an over 55 UK pension transfer, including:

Over 55 QROPS Transfers | FinSec PTX
  • Under current rules you must be aged 55 years or over to transfer UK pensions as a lump sum to Australia. If you are under 55 years of age you can protect your right to a future transfer by deploying a UK SIPP strategy, click here for more information.
  • For information on eligibility rules regarding a UK pension transfer click here.
  • For information on Lifetime Allowance (LTA) click here.

A transfer cannot occur without a QROPS

What is a QROPS and why it is required?

  • A Qualifying Recognised Overseas Pension Scheme (QROPS) is a fund designation that allows individuals to transfer their UK accrued pension into another jurisdiction without attracting tax charges in the UK.

  • QROPS legislation originally established in 2006 was significantly amended in 2015. The new requirement stipulated that to qualify as a QROPS; a fund could not allow access to former UK pension benefits prior to age 55. As superannuation legislation in Australia allows members access to money prior to age 55 in a variety of different scenarios, they could not and continue to be unable to meet the requirements to be a QROPS.

  • The original QROPS list was renamed the ROPS List and when HMRC officially published (July 1, 2015) approximately 3000 QROPS from around the world had been struck off. The number of remaining Australian funds numbered 1 in total.

  • Today the only compliant receiving ROPS funds available in Australia are; Self-Managed Super Funds (SMSFs) where the deed had been amended to only allow members 55 and over, and a single retail fund. A list of these Australian QROPS super funds can be found here.

  • To be eligible these funds must be accepted by HMRC for inclusion on their HMRC ROPS list and need to meet very specific reporting requirements for a period of 10 years (originally 5 years, but extended in 2012) after the date of the last transfer from the UK.

What are your QROPS/ROPS Options – SMSF v Retail

  • Currently, in Australia, it is possible to establish an SMSF and amend the Trust Deed to only allow members 55 and over, in order to obtain QROPS status. Alternatively, you can use the Australian Expatriate Super Fund (AESF), the only retail fund with QROPS status currently in the marketplace.

  • Our initial advice will compare both SMSF and Retail options, showing the differences in costs, features and benefits and investment options.

  • Often people have a perception that an SMSF will be:

    • too complicated a solution
    • require too much of their time to manage on an ongoing basis, and
    • they won’t have the skills to do so.


    This is not necessarily the reality. Our advice will provide you with a better understanding of the SMSF solution, your responsibilities and the support provided to keep your involvement to a minimum should we recommend this as the appropriate QROPS option for you.

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Whilst no two transfers are the same, there are common benefits

  • Tax Savings

  • Historically High Transfer Values (Defined Benefit Schemes)

  • Avoid Future Legislative Risk

  • One Jurisdiction

  • 100% of Your Money Goes to Loved Ones

  • Freedom of Choice
Learn more

Understanding when an indirect transfer via a SIPP is required

What is a SIPP?

  • A Self-Invested Personal Pension (known as a SIPP) is a type of pension scheme which allows you to make your own investment decisions.
  • A SIPP is a UK product and therefore advice can only be provided by a Regulated FCA UK adviser (UK Independent financial advisers (IFAs)).

Why can a SIPP be beneficial to consider?

  • A SIPP may be a good option for people who want to gather all of their pensions into one pot before they transfer benefits to Australia.
  • A SIPP can also:
  • Improve the speed of the transfer to Australia when compared to a direct transfer from the scheme to the QROPS.
  • Utilising a foreign exchange facility within the SIPP allows pinpoint control over conversion rates (GBP to AUD) and potentially significant savings in conversion costs.

When will a SIPP be considered?

  • Following receipt of Australian advice, our UK partners will also review your situation. As part of their advice, they will consider whether it is in your best interest to establish a SIPP to facilitate an indirect transfer, for the reasons listed above, or if a direct transfer to a QROPS is a better option.
  • If a SIPP is determined as beneficial to your situation, the necessary set-up and implementation will be facilitated through our UK advice partners.

When can you move your money out of the QROPS?

Transferring your pension into a registered QROPS scheme triggers the need to be in a QROPS for five full UK tax years (as a minimum). HMRC also has a 10-year reporting requirement. During this period any money moved into a non-QROPS within the relevant period will trigger an unauthorised payment charge of up to 55%.

In this short video, QROPS transfer specialist, Scott Noell discusses:
  • QROPS 5-Year Rule
  • QROPS 10-Year Rule

When is UK advice required?

UK advice is required for all Defined Benefit transfers over £30K or where there is a guaranteed annuity rate. In 2015 the UK Government introduced legislation, ruling that all advice on these transfers must be provided by FCA Regulated Firms.

FinSec PTX offers an integrated global solution incorporating accredited FCA licensed UK advice partners.

OUR OVER 55 QROPS TRANSFER SOLUTIONS

Our over 55 transfer solutions consist of two offerings – Large Case and Standard. While the process we follow for each type of transfer is ultimately the same, it is the level of complexity and strategy involved that differentiates them.

Not sure where to click? Discover the solution that is right for you.

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Over 55 Large Value QROPS Transfer | FinSec PTX

Large Value QROPS Transfer

  • You are over 55 years of age with a company or personal pension that can be transferred.

  • Your pension values at your date of residency for tax purposes is likely to be over $330,000 or you have been making significant Non-concessional (after tax) contributions.

  • Your total personal total super balance is over $1.48M now.

  • You have UK Lifetime Allowance (LTA) issues or existing LTA protection in place. That is your combined UK pension values are over GBP1,073,100 (including pensions benefits already crystallised).

Over 55 Standard QROPS Transfer | FinSec PTX

Standard QROPS Transfer

  • You are over 55 years of age with a company or personal pension that can be transferred.

  • The value of your pension benefits at the date of your residency for tax purposes is likely to be less than $330,000.

  • Your total personal super balance is less than $1.48M

  • You do not have UK Lifetime Allowance (LTA) issues or existing LTA protection in place. That is, your combined UK pension values are less than GBP1,073,100 (including pensions benefits already crystallised).

Not sure where to click? Discover the solution that is right for you.

CLICK HERE
CLICK HERE

The value of our transfer service

Without the correct advice it is impossible to know whether a transfer is in your best interests or not, yet alone whether it can be carried out correctly.

Regardless of intent, simple mistakes made out of a lack of understanding can have a lifelong impact, often costing thousands of dollars.

FinSec’s PTX service is at the forefront of both UK and Australian legislation and have become experts in interpreting its impact on the transfer process – a key reason why other advisers outsource this area of expertise to us.

In addition to the value our advice will provide our service will also navigate the ever-increasing administrative minefield associated with Pension Transfers and minimise your need to be involved.

With good advice comes the ‘light bulb’ moments - QROPS Transfers | FinSec PTX