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QROPS Changes and the Contributions Cap
Pension transfers may seem more complex than ever following the changes on 8 March 2017. Ideally, you would need financial advisors who will look at all of your benefits in Australia and UK to ensure that you are compliant with the legislations of both countries.
Whilst advisors do not have a crystal ball for job security and we appreciate that family circumstances do change, you need to ensure you are settled in your current country of residence.
The UK have now introduced financial consequences should you move countries for new transferees.
If you have not recently obtained a transfer value from your UK Scheme, now may be the time to act and find out what the current level of your benefits in the UK. All transfers will need to consider the following:
Your UK Scheme
It is important to keep up-to-date with the current fund value of your scheme. You can request a transfer value from your UK Final Salary Scheme every 12 months. A Final Salary Schemes funding status can change and it is therefore important to keep ahead of any changes in your fund value and funding status.
Most private pensions in the UK can give you online access. Now maybe a perfect time to obtain access to your scheme and regularly check how your UK fund is performing.
Value of Australian Super
On 1 July 2017, a lifetime contribution cap on the overall value of your fund comes into force. This will mean you may be restricted in transferring your funds into Australia if your overall value of your pensions amounts to 1.6 million.
Timescale for Transfer
Transfers can be time-consuming and with administration delays in the UK, they can take several months. Some quotations from the UK are guaranteed for a period of 3 months. If you receive a favourable transfer value and wish to act on it then it is important to seek advice as soon as possible.
Current Contribution Caps Australia
The current contribution caps until 30 June 2017 are $180,000.00. If you are eligible and meet certain conditions, you are able to utilise up to 3 years of the caps. This means you can transfer your UK superannuation up to a maximum of amount of $540,000. Whilst a new transfer may not make these deadlines, certain schemes will be able to transfer within the deadline, if contribution caps are an applicable consideration.
Changes to Contribution Caps 1 July 2017
The contribution caps will change on 1 July 2017 to $100,000.00. If you are eligible and meet certain conditions you are able to utilise up to 3 years of the caps. This means you can transfer your UK superannuation up to a maximum of amount of $300,000. It is important to ensure you remain within the caps.
The team in the Pension Transfer department at McKinley Plowman can assist and guide you through the process for your own individual circumstances. We have UK options, SMSF and a NEW option coming available in the next few weeks. If you want to know more about the options available for you, you can directly contact McKinley Plowman at (61) 8 9233 9269 or send an enquiry here.
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