Recent press has indicated that a large cohort of British baby boomers are looking to relocate to Australia, removing themselves from the UK’s pension crisis and other financial pressures.
The main ‘push factors’ contributing to this decision, aside from the pension crisis, are the standard of care for the elderly, high taxes, the UK’s cost of living and quality of life.
British expats are very much aware of the financial pull factors too, whereby they can benefit significantly from avenues available exclusively to them upon their move to Australia.
These benefits include a qualified recognised overseas pension scheme, allowing expats to potentially avoid inheritance and other taxes; access to flexible high-return investments; the ability to receive pensions in their choice of currency and being able to access a portion of their retirement fund as a tax free lump sum.
Expats however need to be aware that there are Australian tax implications and other issues associated with the transfer of UK pension fund proceeds to Australia, and there are some special conditions which need to be satisfied.
There are also considerations that need to be made in the determination of how the UK pension fund transfer is taxed, and the key decider here is the timeframe in which the transfer is made. For example, if the pension fund transfer is made from the UK to Australia within 6 months of the member becoming an Australian resident, the result is significantly more favourable than if the transfer occurs after 6 months.
This is a highly complex area of advice and one that requires careful consideration….so if you know of someone that has moved, or is contemplating moving from the UK to Australia, I recommend they seek advice to achieve the most financially effective transition.
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