UK Pension Transfers

IF YOU HAVE A UK PENSION, YOU CAN TRANSFER IT TO YOUR GMI SUPER ACCOUNT

WHAT ARE THE ADVANTAGES AND DISADVANTAGE?

Advantages:

  • A UK pension that is repatriated to NZ will be available to you as a lump sum when you are eligible to withdraw it.
  • The administration of your funds will be in NZ as opposed to the UK. As an investor you would have greater access to information about how your money is performing and be able to contact the administrators if and when you need to without the hassle of dealing with an overseas company.

Disadvantages:

You can only transfer your UK pension to a NZ superannuation scheme that has been certified QROPS (Qualifying Recognised Overseas Pension Scheme) compliant by HM Revenue and Customs. You will be subject to any lock-in provisions set by this scheme, even if under the UK pension rules you may have been able to access the funds earlier. The GMI Superannuation Scheme has QROPS certification.

  • Withdrawing or transferring your funds to an unapproved scheme prior to the lock in date agreed with HM Customs and Revenue may result in HMRC charging an unauthorised transfer tax penalty which can be up to 40% of the transfer value.
  • The full value of the UK pension will be exchanged into NZ dollars on the day it is transferred to NZ, at that day’s rate. We are unable to hold transfers in GBP for a more favourable exchange rate.

WHAT IS THE PROCESS?

Just follow these steps. The process generally takes around three months to complete.

  • You must enrol in a NZ registered superannuation scheme which is registered as a QROPS, for example the GMI Superannuation Scheme. Start the application process here.
  • You complete an authority to transfer form giving us details about the pension scheme you wish to transfer.
  • We contact the UK pension scheme and request the appropriate transfer forms and a current transfer value quote and send these to you to complete.
  • You may wish to seek advice regarding whether to proceed with the transfer based on the transfer value quote provided.
  • We will complete the transfer forms and send these back to the UK pension provider along with proof of the QROPS registration. 
  • UK pension provider will then pay across transfer payment as a lump sum in GBP and this is immediately deposited to the Scheme bank account and converted to NZD. (We are unable to hold transfers in GBP for a more favourable exchange rate.)

WHAT IS THE COST?

The GMI Superannuation Scheme does not charge an administration fee for this service. There may be fees charged by your UK pension provider.

WHAT HAPPENS TO THE MONEY?

The funds will be invested in the GMI Superannuation Scheme and subject to the existing rules of the scheme. With the GMI Superannuation Scheme you can select a Conservative, Balanced or Growth investment, or a blend of these. More information available here.

The GMI Superannuation Scheme is a PIE (Portfolio Investment Entity) so your investment income is taxed at either 12.5%, 21% or 30% (Prescribed Investment Rate or PIR).

To calculate your correct PIR, follow the instructions from IRD here. If you are still unsure about which PIR you should choose, please phone the IRD on 0800 227 774.  GMI is not able to provide advice to members regarding their PIR.  
The funds will be locked in until you are eligible to withdraw from the GMI Superannuation Scheme and unless you were on the wrong PIR there will be no further tax payable on withdrawal. You will be able to withdraw the money in a lump sum or as incremental withdrawals.

TRANSFERRING TO ANOTHER SUPERANNUATION SCHEME

If you transfer your UK Pension to the GMI Superannuation Scheme, and you later wish to move the funds to another superannuation scheme, you should be aware that unless you transfer to another QROPS accredited scheme, HMRC may charge an unauthorised transfer tax penalty which can be up to 40% of the transfer value. This penalty may also apply for any withdrawals before the lock in period has finished.

Need more information? Email us.