FAQ

Do I have to have a super scheme in NZ to transfer my UK pension into?
Yes, you do. What's more, UK pension funds must now be transferred to what's called a Qualifying Recognised Overseas Pension Scheme (QROPS). Any funds transferred into a non-QROPS scheme may be subject to a tax penalty of up to 55% of the transfer value. All the schemes we recommend provide confirmation of their QROPS status.

We can help you establish a QROPS scheme in NZ with a choice of leading fund managers, and we can provide a range of investment advice that you might find useful as part of your planning process.

How do QROPS schemes work?
You can transfer your UK pension funds into a QROPS scheme in NZ without incurring any tax charges. Furthermore, up to 40% of any money you transfer into a QROPS scheme in NZ may go into an unlocked fund. You can withdraw from this unlocked fund at any time before retirement age, however, you may face a tax liability for this early withdrawal if you make it within six years of leaving the UK and arriving in NZ. After that you can withdraw from the unlocked portion of your fund with no tax issues at all. Please note that some UK pensions allow you to take up to 25% of your funds from age 50 or 55. These benefits are not taxed, even within the six year window of leaving the UK.

Will I pay tax on my NZ scheme if I withdraw the money after I retire?
No, there is no tax to pay on withdrawals made from a QROPS scheme in NZ once you reach retirement age. The money comes from a tax paid investment vehicle - as long as you have lived outside the UK for at least six years.

Should I transfer my UK pension fund to NZ if I think I might return to the UK to retire?
No. If you intend to return to the UK to retire, don't transfer your pension! Once you have made the transfer, you cannot undo it - you have given up all rights to your UK pension.

What are some of the other benefits of transferring my UK pension to NZ?
The tax benefits are outlined in the above questions. However, there are other advantages to transferring your scheme to New Zealand:

• Retirement options are more flexible in this country, allowing you better control of your pension in retirement.
• If your money is in New Zealand, you have control of your funds.
• There are significant estate planning advantages:
  • If you pass away with your money still in a UK scheme, your spouse is likely to receive a pension worth only half of what you would have received.
  • If you have no spouse, or your spouse dies as well, your UK pension scheme dies too!
  • New Zealand retirement schemes pay the whole benefit to your spouse or dependants.

What are the implications of relocating to NZ, but leaving my pension in the UK?

• If you leave funds in a UK pension, you should pay tax in New Zealand on any growth made by your UK scheme.
• When your pension is paid at retirement, benefits drawn in New Zealand will be classed as income and taxed accordingly.
• If you receive an annuity, for example, in the UK, and then transfer to New Zealand, you will pay tax in both countries (in pounds and NZ$). If your pension had been transferred to a tax-paid scheme in New Zealand there would be no tax to pay on any drawings from the scheme after you had been in New Zealand for six years.
• However, if you transfer your pension to NZ, you can enjoy considerable tax advantages and early access to some of your funds.

What's involved in the actual transfer process? Can I do it myself? How long does it take?
You could manage the transfer yourself, however the process is complex and confusing, and can be very frustrating and time-consuming. Our considerable experience of the process, and our knowledge of the people involved, means we can streamline the transfer process, saving you time, money and stress.

Do you provide any other financial services?
Yes, we do provide other financial services. See Financial Services page.

My pension contains protected rights - can I transfer it to NZ?
We have transferred over 500 pensions from the UK, and are well used to dealing with 'protected rights' issues. They don't cause a problem as long as we follow accepted procedures and guidelines. It's worth noting, however, that in some circumstances protected rights must be locked in until retirement.

Can you provide me with references?
Please see our testimonials page.

I have read about New Zealand's Foreign Investment Funds Regime, which could result in a New Zealand tax liability on the growth of funds offshore. Does the FIF regime apply to UK pensions? If so, wouldn't I be better off to defer the transfer as long as possible to maximise tax-free growth and then have tax-free income in retirement?
Yes, the FIF rules do apply to UK pensions. Usually, if the transfer is made within four years you should be exempt from the rules. However, we have dealt with clients who have delayed the transfer only to find circumstances changed to their disadvantage.

Do you charge a fee for your pension transfer service?
Yes, we do charge a fee. A component is an upfront fee and the remainder is charged as a percentage of the value of the transferable pension. We make a point of clearly explaining all fees in advance so there are no misunderstandings. If you have any concerns about the professionalism of our services, please feel free to contact any of the people who have provided testimonials about us.

Can you give me advice on approved schemes in New Zealand?
Yes, we can advise on New Zealand schemes which - very importantly - are approved as QROPS schemes. We can also provide advice and information on a range of approved scheme providers. Furthermore, we can also assist with a full range of other financial and investment planning services .

Should I establish a family trust in NZ before I emigrate?
There are certainly advantages to doing so. The inheritance tax rate in the UK is 0% for the first £300,000 (rising to £350,000 by 2010) and 40% on the balance at death. In NZ, there are no death duties, but you are taxed on 'gifts' over $27,000 pa. Setting up a trust after you emigrate and transferring your assets into it is a slow process, and it can take many years to complete and therefore 'forgive' your entire debt. We can put you in touch with experienced advisors who can discuss with you the implications and benefits of establishing a trust before you emigrate.