Speaking to SMSF Adviser, AMP SMSF’s head of policy, technical and education services, Peter Burgess, said that under UK legislation, transfers to an overseas pension scheme are only permitted if it is a Qualifying Recognised Overseas Pension Scheme (QROPS).
On April 6 this year, several changes were made to the conditions that must be satisfied in order for a scheme to become or remain a QROPS.
To do so, funds must satisfy the UK’s Pension Age Test, Mr Burgess said. Unless a person is retiring due to ill health, this test requires that benefits are not to be paid before age 55.
“We understand that in a meeting between Treasury and Her Majesty’s Revenue and Customs (HMRC) last Friday, the HMRC advised Treasury that Australian super funds would not be able to comply with the new QROPS requirements because of the overarching legal framework in Australia,” Mr Burgess said.
“We think this may be a reference to the mandatory requirement to release a benefit in Australia under a release authority basis. This appears to be the case regardless of what amendments are made to the fund’s trust deed.”
Mr Burgess said that while most of the discussion appears to be in the context of retail funds, it is likely “the same argument” will apply to SMSFs.
“For UK transfers which have occurred since 6 April 2015, it appears the HMRC may consider relief but the process to apply for that relief is yet to be determined. Unless Treasury is successful in securing some modifications to the QROPS requirements, which at this stage appears unlikely, the prospect of any future UK transfers to Australian superannuation funds, including SMSFs, also appears unlikely,” Mr Burgess said.
At this point, it appears Friday’s development will not have an impact on SMSFs that received UK transfers before April 6 this year.
It seems one impact will be that, for UK reporting purposes, these funds will essentially take on the status of a former QROPS. However, Mr Burgess said this should have no impact on the tax treatment of UK funds transferred into their fund before April 6, assuming they had previously met the QROPS conditions.
What a insane level of thinking disregarding the fact that money in the fund is part of salary earned by the persons which on the grounds of marginal tax relief these so called government want to take absolute control on the lives of earner which billions are squandered on upkeep of morons in these countries besides ripping of the world by so called colonisation.You all will rot in hell,if there is any.
I masterminded the first ever Australian pension transfer solution in 1995.
Why hasn’t the penny dropped. Australia you have to change not UK. Do you really think UK will grant an exemption that UK residents don’t get. Wake up!
So when you change your legislation to fit with UK, let super be transferred to UK & simultaneously establish an inquiry into transfers that took place which shouldn’t have taken place & were completed in blissful ignorance of member best interests.
Problem source is zero understanding of QROPS rules, its not a product, nor an automatic decision to transfer. It is an option under UK law provided all the onerous conditions set down by HMRC are met a transfer is possible. We are now examining advice process & suitability checking advice delivered to transfer & I am struggling to use the term bewildering, I am seeing shocking advice. This is a problem that runs deeper.