The Ticking Time Bomb…
This article is based on legislation which was in force at the time of print. Some of this legislation has now changed. Please contact us to discuss your options further and how you may be impacted.
Many of you would have heard of one of Australia’s financial time bombs for immigrants – the 6 month window to get your pension transferred to Australia. But, what is this time bomb and when is the fuse ignited?
The fuse is lit when your plane hits the tarmac on the other side of the world and you have finally arrived in your new country of residence – Welcome to Australia, the land of sunshine and surf!
Finally, after months of planning, you have finally arrived. Immediately, there are a million things to consciously consider – including deciding where you are going to live, how you will earn your daily crust and where to send your kids to school. What an experience – one which is exciting, and overwhelming at the same time!
Tick… tick ….tick … tick. A few months later, you begin to take control. You have a lovely new house, your kids are at school, and you have a great new job. You begin to ‘chill out’, you make new ‘mates’ and have even learnt how to cook a ‘Shrimp on the Barbie’ whilst holding a ‘stubbie’ (beer) in one hand – not that easy for beginners. Life is bliss and you are loving it.
Then, once all seems in control….. you fall asleep one night with a smile on your face…but you can’t sleep. ….the subconscious pops up and starts ‘yabbering on’ (bugging you). Instead of dreaming of sand and surf, for some reason your UK pension pops into your head. And then you realise…. The time bomb is about to go off!!
‘Struth!’ (My goodness). You have been in Australia for over 4 months and have completely forgotten about your UK pension fund..and that you have only 6 months from becoming an Australian resident before tax starts accruing!
By that stage, it’s bound to be too late… you are stuck with emergency reliance on third parties… and you need no reminding how slow these can be. You have ‘Buckleys (little if any) chance’. Not only do you need to rely on the UK scheme, UK employer, Australian scheme and Australian employer but what about the UK Inland Revenue and Australian Taxation Office. Eeek!
You get up…. grab ‘brekkie’ (breakfast) and trundle off to work. The time bomb goes off and the taxman is upon you like the grim reaper – taxing all the gains on your UK money purchase fund and looming large to tax your company pension at retirement. If only you had sought professional help before leaving the UK…
Prism Xpat is regulated by UK Legislation and is not regulated by the legislation of any other country, we cannot therefore take responsibility that our advice or recommendations satisfy the legal requirements for advisers in any other country. You should seek advice from a suitable expert on how the other country’s regulations for advisers may apply to your situation.