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To help you get a better understanding of what is involved in transferring your UK pension to New Zealand, here are some frequently asked questions.
What is a QROPS?
QROPS stands for qualifying recognised overseas pension scheme. It is a scheme that meets criteria set by Her Majesty’s Revenue and Customs (HMRC) which allows pension transfers without penalty tax. There are some circumstances in which you may be able to transfer to a non QROPS scheme. However, in that case you will incur the UK penalty tax regime.
Am I eligible to transfer?
You are eligible to transfer your UK pension if you meet the following criteria:
• You are not already receiving income from an annuity that was purchased with your UK pension funds.
• Your pension is not an unfunded public sector pension, a civil service pension or State pension.
• You are transferring to a QROPS scheme.
Can I transfer my UK pension to a New Zealand KiwiSaver scheme?
No. New Zealand KiwiSaver schemes do not meet QROPS requirements.
How long does it take for UK pensions to transfer?
This largely depends on which scheme we are currently using, where it is based and whether you have provided all of the necessary information in the application process. Generally, UK pension transfers take between three and six months. When your UK pension funds are received by the New Zealand scheme of your choice, both you and your advisor will be sent confirmation.
Do I have to pay NZ or UK tax when transferring my UK pension?
If you are not a New Zealand tax resident when you request to transfer your UK pension funds then you may incur a 25% UK tax charge called the ‘Overseas Transfer Charge.’
If your UK pension funds are transferred to New Zealand within the first four years of you becoming a New Zealand tax resident, then generally you will not be required to pay NZ tax. However, this changes if funds are transferred after four years of your becoming a New Zealand tax resident.
Once your funds have been transferred to NZ, you will be required to pay tax on the income from your investments.
To find out more about tax requirements specific to your UK pension transfer we recommend that you speak to one of our experienced team members.
Can I leave my pension in the UK for now?
You aren’t legally required to transfer your pension to New Zealand so you can leave your funds there for as long as you choose to. However, there are many benefits to transferring your UK pension to New Zealand. You can read more about them in this post.
Need to Find out more?
Before deciding to transfer your UK pension, it is important to seek expert advice. To help you understand the risks and benefits involved in bringing your UK pension to NZ, talk to our expert team today.
At Hallam Jones, we have no entry fees, no termination fees, no withdrawal fees, no switch fees and no transfer fees. Get in touch today about a FREE review of your QROPS funds.