UK Pension Transfers Help & Advice

Common Questions

• Do I have to transfer my pension?
• Should I transfer my pension?
• What types of pensions can be transferred?
• What is a QROPS?
• Are there any timing issues that need to be considered?
• What are the tax issues that need to be considered?
• Do I meet the criteria required to transfer my UK Pension?
• What are the differences between NZ and UK pensions?
• Can you hold my pension in Sterling pounds until I am happy with the exchange rate?
• How secure is the transfer process?
• What are the main benefits of transferring my UK pension to New Zealand?
• What are the fees?
• How long is the transfer process?
• Can I transfer my own pension?
• Can I make withdrawals from my transferred funds?
• What are the NZ Income Tax rates?
• What are the NZ State Superannuation Payment amounts?

Do I have to transfer my pension?

No you don’t. However our free, no-obligation assessment allows you to evaluate your options and benefits at no cost.

Should I transfer my pension?

This will be a decision that is based on your UK pension and your individual circumstances.
Our free, no-obligation assessment allows you to make an informed decision.

What types of pensions can be transferred?

Almost any personal and company UK pension fund can be transferred to NZ as long as the funds are transferred into an approved NZ QROPS (Qualifying Recognised Overseas Pension Schemes). In addition:

• Pensions in payment that have a residual fund balance can be transferred.
• Even partial transfer of funds can be made dependent on the UK scheme administration.

What is a QROPS?

This stands for Qualifying Recognised Overseas Pension Scheme. Introduced by the (UK) Pension Simplification rules in April 2006, a QROPS is a NZ Superannuation plan that has been approved by Her Majesty’s Revenue Collectors (HMRC) to accept transfers of UK pension schemes & plans.

HRMC requires all QROPS schemes, whose members withdraw pension money, to notify them of the amount, date of payment, name and address of the member to HMRC. They will then seek to charge an “Unauthorised Payment Charge” (UPC) of up to 55% of the value of the fund.

Are there any timing issues that need to be considered?

Under the Foreign Investment Fund (FIF) regulations recently introduced in NZ, many investments and personal pensions held in the UK can be taxed as capital gains in New Zealand.

The good news is that new NZ residents have up to four years to organise their overseas investments and personal pensions before they have to declare them for tax purposes. This gives you time to transfer your funds to New Zealand without the FIF rules applying.

If you have been in New Zealand 4 years or more, it’s not too late to seek advice on the best ways to transfer your funds and reduce your tax liabilities.

What are the tax issues that need to be considered?

Most UK funds offer the option of up to 25% tax free lump sum on reaching retirement age. However, if you bring this lump sum to NZ, it will be deemed income and taxed in New Zealand at your marginal tax rate. In addition, if you receive regular benefits from your UK pension, this is also deemed income and will be taxed in NZ at your marginal tax rate.

By transferring your pension to New Zealand, you’re no longer subject to UK tax rules and related taxes (once you have been living outside of the UK for five full tax years). Your transferred pension then qualifies under the New Zealand Superannuation regulations and benefits received are then tax free.

NB: In taxation areas we seek the advice of our specialist tax associates.

Do I meet the criteria required to transfer my UK Pension?

Since the introduction of the April 2006 Pension simplification regulations, you now only need to have the intention to move permanently abroad from the UK to be able to transfer your pension to a NZ QROPS.

What are the differences between NZ and UK pensions?

NZ Pensions	UK Pensions
At retirement, you can access up to 100% of your pension as a lump sum or as retirement income or a combination of income and lump sum.	At retirement, you can access up to 25% of your pension as a lump sum.
All contributions to your NZ pension fund are from tax paid income plus the growth of the fund is taxed. At retirement, you get the full benefit of your pension completely tax free	All contributions to your UK pension fund receive tax top ups plus the growth of the fund (except dividends) is exempt from taxation. At retirement, all benefits, whether drawn down in NZ or the UK, are deemed income and are taxed at your marginal tax rate. This can be as high as 38%
Your pension does not die with you. Your personal superannuation savings are part of your estate on death and can be passed on to your children, heirs and beneficiaries.	Your pension can die with you. If you die with a UK pension scheme your spouse can get up to 50% of your pension. If you both die, your pension may die with you.
You are eligible for a NZ state pension at age 65 if you have lived in New Zealand for a total of 10 years since you turned 20 and a total of 5 years since you turned age 50.	As an ex-UK tax payer, you are eligible for a UK state pension depending on the contributions you made as a tax payer. Your UK state pension will be offset against your New Zealand superannuation entitlement to avoid double dipping.
Your NZ pension funds are not affected by exchange rates and bank transfer fees	Your UK pension funds will be affected by exchange rates and bank transfer fees
You have greater control on how and where your pension is invested.	You have limited control over your pension
Depending on the requirements of your UK pension scheme, you may be able to access up to 50% of your pension funds within 3 months of transfer and the balance within 2 years.	You can not access your UK pension funds until age 50 (or 55 if after 6 April 2010). Any access before this will be subject to an “Unauthorised Payment” charge of 55%. (40% of the amount withdrawn plus a surcharge of 15%)

Can you hold my pension in Sterling pounds until I am happy with the exchange rate?

Yes we are able to transfer your pension in pounds and then wait until you are happy with the exchange rate before exchanging the money into New Zealand dollars

How secure is the transfer process?

We only transfer pension funds directly into a QROPS in your name. We do not use a trust account or handle your money so the process is extremely secure.

What are the main benefits of transferring my UK pension to New Zealand?

You gain:

• Control of your funds
• Significant tax benefits
• Easy access your funds
• Long-term financial security for you and your family
• Relief from exchange rate fluctuation worries
• More and better investment options

What are the fees?

We offer a free no-obligation assessment of your options, entitlements and benefits. If you decide to transfer your UK pension to NZ, we will then discuss and agree our fee with you prior to transferring. Our fees are deducted from the transferred funds and scaled according to the total amount of funds transferred.

Click here for a free copy of our Disclosure Statement.

How long is the transfer process?

Each pension transfer is different as every person’s circumstances are different but in general the process takes about 3-6 months.

Can I transfer my own pension?

Yes, you can transfer your pension yourself. However, the process is complex and confusing as the documentation requirements differ from one scheme to another. If you get it wrong, it could cost you thousands of pounds. Pension Transfers Direct provides expert advice to save you time and stress by simplifying the transfer process for you.

Can I make withdrawals from my transferred funds?

It may be possible to withdraw up to 50% in cash three months after the receipt of the transfer, but is dependant on the restrictions imposed by the UK pension provider and the NZ QROPS. This will be explained once entitlements and benefits are known.

What are the NZ Income Tax rates?

NZ Income Tax rates (from 1 October 2008)

	Income Tax rate
Up to $14,000	12.5%
$14,001 - $40,000	21%
$40,001 - $70,000	33%
$70,001 plus	38%

Visit http://www.ird.govt.nz/how-to/taxrates-codes/itaxsalaryandwage-incometaxrates.html

What are the NZ State Superannuation Payment amounts?

NZ State Superannuation Payments (as at 1 April 2008)	Weekly Payments After Tax
Single living alone	$285.87 $14,865 P.a. (approx)
Single (sharing)	$263.88 $13,722 p.a. (approx)
Married, de facto or civil union couple (partner not included)	$439.80 $22,870 p.a. (approx)
Married, de facto or civil union couple (both partners qualify)	$209.68 (each) $21,807 p.a. (approx)
Married, de facto or civil union couple (only 1 partner qualifies)	$219.90 $11,435 p.a. (approx)