Why should I consider transferring my UK pension scheme?
The growth in a UK pension scheme is allowed to roll up virtually free of tax for UK residents. However, a NZ tax liability accumulates annually on the growth of a UK pension scheme, if the member is a NZ resident, even if they are not old enough to access the funds! The tax liability is accumulated annually until scheme proceeds are paid out, either by transfer or withdrawal of benefits from age 55. Therefore the longer the member and their UK pension scheme remain in different countries, the bigger the potential NZ tax liability will be.
Transferring a UK pension scheme to a NZ scheme that is also a QROPS, can help mitigate, if not totally eradicate, this potential tax liability. In some cases it may be more beneficial to transfer to a SIPP than to a NZ QROPS. You may even choose to leave your UK pension where it is. The important thing is to gain an accurate picture of your situation, so that you can make an informed and appropriate decision.
A pension transfer to a SIPP or NZ QROPS may not be relevant or appropriate in all instances. The decision whether to transfer or not is complex, and it is important to consider the benefits, risks and disadvantages before determining if a transfer is suitable. GBPensions recommends that all clients seek independent financial and tax advice, personalised to their individual circumstances.
Tony Chamberlain2022-10-06T14:40:32+13:00June 29th, 2020|FAQs|Comments Off on Why should I consider transferring my UK pension scheme?