If a pension transfer is appropriate for you, GBPensions is now offering a legitimate alternative to the usual UK pension transfer to a NZ registered QROPS (Qualifying Recognised Overseas Pension Scheme.) Our clients now have the option of transferring to a UK registered SIPP (Self-Invested Personal Pension) – a choice which could provide significantly better benefits for some clients, in terms of tax and access to funds.
In fact, GBPensions' director Tony Chamberlain is adamant that, if a client is aged 55 or older during their first 4 tax years of residency in New Zealand, they should investigate the option of a SIPP as well as a NZ QROPS. The benefits are not limited to those who fall within these criteria however, and other clients – depending on their circumstances and goals – should also consider using a SIPP for their transfer.
If a client requires immediate access to their funds, Tony acknowledges that transferring a UK pension to a SIPP does involve more paperwork – for the adviser, at least – and can therefore be a slightly more lengthy process than a conventional NZ QROPS transfer. This should be factored into a client's financial planning.
In order to help determine whether a SIPP could be the better choice than a NZ QROPS, Tony urges anyone who is thinking of transferring their UK pension to carefully consider the following factors:
- Your age – are you close to 55?
- How long have you been in New Zealand?
- If you transferred your UK scheme to a NZ QROPS today, would you have any surplus funds with which to pay any potential NZ tax liability?
- Are you 100% positive that you will retire in New Zealand?
- Are you prepared to lock up 70% of your transferred funds for life?
Additionally, Tony strongly recommends that clients seek the advice of a tax specialist who has comprehensive knowledge of both the UK and NZ systems. (GBPensions' advisers regularly work with such individuals for the benefit of clients.)
As a final point, Tony highlights an important rule change scheduled for later this year. "NZ legislation which comes into force on 1st December will seriously affect how much a client can access from their NZ QROPS and when," says Tony. "If you are ready to transfer a UK pension scheme, this should also be taken into consideration when deciding what product is most appropriate. In my opinion, the revised regulations could further strengthen the case for a SIPP for many clients."
Original blog posted 29th May 2016. Updated for content 4th July 2016.