Barton Consultancy | United Kingdom (UK) Pension Transfer
16135
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United Kingdom (UK) Pension Transfer

United Kingdom (UK) Pension Transfer

UK pension fund transfers to Australian Qualifying Recognised Overseas Pension Schemes (QROPS).

Background

Members of United Kingdom pension funds who become Australian residents can transfer their UK pension equities to Australian superannuation funds which are registered as Qualifying Recognised Overseas Pension Schemes (QROPS). Many, but not all, major Australian superannuation funds are QROPSs. A full list of QROPSs is at http://www.hmrc.gov.uk/PENSIONSCHEMES/qrops.pdf.
The increase in value of the member’s equity in the UK scheme between the date of Australian residency and the transfer of funds to Australia is normally included in taxable income and taxed at marginal rates. If however, an election is made under Section 305-70 of the Income Tax Assessment Act 1997, the member pays no tax and the receiving superannuation fund pays tax of 15% of the increased value.
UK funds generally determine transfer values at the time of transfer of funds to Australia, but not at the time of Australian residency. People transferring funds to Australia therefore need a calculation of the transfer value that would have applied at the time of Australian residency.

Services

The practice’s services in this area are normally provided to accountants, financial planners and trustees of these funds. These services comprise the certification of the value of pension entitlements at the time of Australian residency.

Benefits

The primary benefit of actuarial advice is the authority provided by an independent expert valuation of the member’s interest at the residency date.
Experience

The practice has been involved in the valuation of individuals’ entitlements in superannuation schemes of various types since its 1980 inception, and those of UK pensioners since 2007.

Methodology

Generally, the practice’s methodology involves the use of methodology and factors published by the UK Government Actuary’s Department to determine the value that would have applied at the time of Australian residency. Before determining that value, the practice reconciles the actual UK transfer value to ensure that it is using the same methodology and assumptions as the ceding fund. If this reconciliation is not materially correct, the calculation does not proceed without further discussion with the client.

Information needs

The information that the practice usually needs to certify these values is generally contained in the pensions funds’ letter offering the the final transfer value. The practice has prepared a spreadsheet download(.xls), which contains the information that it needs.
As the UK funds use different formats in reporting to their members, it is sometimes necessary to infer inputs to the spreadsheets from other fields in the spreadsheet. The spreadsheet therefore makes suggestions for most fields. Users can input the suggested numbers or input numbers from the supplied information.
The spreadsheet checks the populated data and indicates errors. Once users are satisfied with their inputs, they can click on a button which emails the spreadsheet to us.

Fees

The practice believes that quality service justifies its price, but seeks to be competitive in its fee structure and will quote fixed or maximum prices if required.
Hourly fees apply unless the task is solely related to the production of a standard certificate. Where the task makes substantial use of standard systems, usage charges apply.

Fees quoted do not include GST.

 Description 

Rate

Unit

[Superannuation- Small]  
UK Pension transfer – certificate fee $312.50 Item
Certified value $1 $’000

 



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