Frequently Asked Questions
Q. Why would I want to transfer my pension to New Zealand?A. Countries around the world have different attitudes to savings towards retirement. New Zealand is one of the most liberal in terms of access to savings prior to retirement provided there is a valid reason for access to those savings.
Q. I'm now living overseas. Why can't I simply apply to my pension provider to cash up my UK pension?A. UK pension regulations are very strict and prohibit unauthorised payments from UK registered pension schemes. This is because contributions are "tax relieved" resulting in a benefit for the contributor which is only available at retirement age - or in other very limited circumstances. Authorised payments are as follows:-
- Pension Commencement Lump Sum.
Usually 25% and only available at age 50 years up to 2010 and 55 years thereafter. - Serious Ill-health Lump Sum
- Short Service Refund Lump Sum –
Where a member has contributed to an occupational pension scheme for less than 24 months. - Trivial Commutation Lump Sum –
Only available at retirement age where the pension fund balance is less than 1% of the Life Time Allowance.
A. Yes – provided they are transfers to a Qualifying Recognised Overseas Pension Scheme (QROPS). Britannia operates a QROPS.
Q. What is a Qualifying Recognised Overseas Pension Scheme (QROPS)?A. A QROPS is an overseas scheme which has been examined and listed on the Her Majesty’s Revenue & Customs website to accept transfers from United Kingdom Registered Pension Schemes. Britannia's scheme has been approved in this way.
Q. Is there any tax payable upon exit from my UK pension plan to an overseas scheme?No UK tax is payable if the transfer is to a QROPS, as such transfers are authorised payments. It is unlikely that a transfer to a non-qualifying overseas scheme would proceed because of the extreme tax penalties. An unauthorised payment charge of 55% would be levied and the exporting scheme would also be liable for a further 40% penalty charge.
Q. Can the overseas QROPS scheme make payments to members that would be deemed unauthorised in the United Kingdom?A. All overseas schemes, even if they are QROPS schemes, must abide by the pension regulations of their own country of domicile. Some countries have pension regimes that are as rigid as those in the UK, but some regimes are more flexible. New Zealand has a very light-handed pension regime that allows payments to members in circumstances not allowed in the United Kingdom.
Q. In what circumstances can funds be released to members of New Zealand pension schemes?A. Most New Zealand schemes allow the tax-free release of funds under the following circumstances:-
- Financial hardship (proof required)
- Serious illness or injury (medical evidence must be provided).
- Death before retirement.
- Attaining the age of 60 years.
- Permanent emigration to another country.
A. The transferred funds are invested in a purpose-build pension scheme managed by Plan B Wealth Management Ltd.
Q. How much can I gain access to if I transfer my funds through Britannia Financial Services?A. Britannia will transfer your funds to a fully qualifying QROPS based in New Zealand, meaning there will be no taxes payable upon exit from the United Kingdom. Once the funds are transferred into the New Zealand scheme, and provided the transferee has been absent from the UK for a period of 5 UK tax years, the transferred funds can be released in full subject to the rules of the local scheme.
Q. What if I've not yet been away from the United Kingdom for 5 tax years.A. Your funds will be professionally managed by Plan B Wealth Management Ltd for the remainder of the 5 tax year term in a conservative or defensive (fixed interest) fund, and then made available to you in a currency of your choice.
Q. Why shouldn't I wait until I've been absent from the UK for the required 5 tax years before transferring?A. This is because UK regulations are constantly changing. There is a window of opportunity available right now, and so if you genuinely want access to your locked in funds, now is the time to commence the transfer process to ensure future access. The date of release of your funds without penalty will be advised to you as part of the Britannia pension transfer process.