Have you heard of British pension transfers? If not, you may have heard of the advice many expats from Britain have been getting about transferring a lot of their pensions from the UK into New Zealand to avoid losing their savings in big chunks to the tax man.
The bill for Taxation including Remedial Matters, Foreign Superannuation and Annual Rates sets out new, simple rules of overseas taxes that for some, make it a good idea to do British pension transfers. For instance, under the proposal of changes that will occur on the first of April, 2014, foreign superannuation schemes will tax lump sums only when they are transferred or withdrawn to an Australian or a New Zealand scheme. These taxes will be dependent on the returns of investment made while the individual was a resident of New Zealand.
It is not very complicated to do British pension transfers to an overseas Qualifying Recognized Overseas Pension Scheme but this does involve changes in what ‘retired’ means to you. In essence, QROPS is not about early pension fund access or about cash back. Instead, these are long term strategies of financial planning for international workers and expatriates who have built up UK corporate or private pensions.