Financial Pitfalls in migrating to Oz

Yesterday sterling hit a 10 year low against the Australian $ so it is now even more important that those considering migrating ‘Down-under’ should take expert advice, say migration finance experts Montfort International plc (http://www.miplc.co.uk/).
With Australian mortgage lenders variable rates at close to 9% and a faltering property market in the UK, your financial position should be top of the list.
A family converting £300,000 at the end of February 2008 might have in the region of $630,000 to get them established in Australia. Whereas someone who had planned ahead and arranged a forward contract (where you lock in today’s rate with a deposit of typically 10% and settle the balance at an agreed point in the future) as recently as August of last year, could be sitting on $768,000. How long would it take you to save that additional $138,000?
All very well with the benefit of hindsight, however a good financial adviser would have had you monitoring the exchange rate as soon as you had started your migration planning, ­­­­putting in place a strategy to help you capitalize when the exchange rate is favorable. In the current climate you need to be thinking about whether you should convert your capital into Australian dollars; after all, the situation could get worse before it gets better. Should you hedge your bets and exchange some of your funds now? What are the tax implications if you don’t convert prior to departure? How to get the best returns on your money whilst you wait for the situation to improve?
Whatever your financial intentions, seeking guidance early from the qualified advisers at Montfort International (info@miplc.co.uk or freephone 0800 018 3571) before you finalise your migration plans can help you to a more comfortable retirement ‘Down-under’.

Top up your pension before you go,go (Downunder)

If you are considering migration to Australia you have probably wondered whether you should transfer your pensions overseas, but what you might not have considered is whether you should top up your pensions whilst still earning a UK salary. Higher rate tax payers will receive 40% tax relief on their contributions in the UK and if you subsequently transfer the plan to an Australia superannuation fund, you will be able to access the funds 100% tax free from the age of 60. This represents an effective return of 66% on your investment in addition to any growth in your fund in the meantime!
This may sound too good to be true, but seeking advice early from migration finance experts Montfort International plc (www.miplc.co.uk) before you finalise your migration plans can help you to maximise your finances ‘Down-under’.
There is no similar incentive to invest after tax income into Superannuation in Australia; which is why it is recommended you consider your Retirement Provision before you start packing any bags. Although there is no cap on contributions to UK pensions, there is a limit to the amount on which you receive tax relief (the higher of £3,600 or 100% of earnings to a maximum of £235,000).
Whilst it makes sense to add to your pensions before you migrate, some people will be more interested in getting their money out. If you transfer your UK pension funds overseas, in certain circumstances it is possible to access 100% of your funds as a lump sum after being non-UK resident for 5 consecutive UK tax years.
Whatever your financial intentions, seeking advice early from the qualified advisers at Montfort International (info@miplc.co.uk, call 01483 202072 or freephone 0800 018 3571) before you finalise your migration plans can help you to a more comfortable retirement ‘Down-under’.

Retiring Abroad?

Migration can provide new possibilities to those who wish to access their pensions before retirement, say migration finance experts Montfort International plc (http://www.miplc.co.uk/). It is possible to transfer your pensions to an overseas arrangement that has registered as a Qualifying Recognised Overseas Pension Scheme (QROPS) with HM Revenue & Customs.
Broadly speaking, the rules of the QROPS must be the same as a UK pension fund when paying out benefits. The QROPS will have undertaken to report back to HMRC on certain events for the first five years of a member’s non UK residency. After this time the requirement to report back to HMRC falls away and pensions in certain jurisdictions will permit access to 100% of the fund before age 55. This may sound attractive but care needs to be taken that the overseas fund does not breach QROPS legislation as you could face punitive UK tax charges. Similarly, you will also need to check the tax position of any overseas fund in your retirement jurisdiction to ensure you don’t come unstuck there.
Each person’s circumstances are different and while transferring your funds to another jurisdiction may not be suitable for many, it could provide good opportunities for others.
Previously an individual had to be residing in the country to which they wished to transfer this pension fund. As this is no longer necessary, migrants can now transfer their pension to the jurisdiction which offers the most advantageous tax treatment and flexibility for their funds. This is why it is important that you seek specialist advice from someone who is able to advise on both UK and QROPS requirements and your overseas tax position. A foreign adviser who is used to giving advice on domestic issues will not be able to give advice on the full range of possibilities open to UK migrants.
Whatever your financial intentions, seeking advice early from the qualified advisers at Montfort International (info@miplc.co.uk, call 01483 202072 or freephone 0800 018 3571) before you finalise your migration plans can help you to a more comfortable retirement overseas.

Montfort clients feature in Jewish Chronicle article

Montfort clients feature in Jewish Chronicle 18/04/2008 article Next year in...Sydney by Jan Shure with additional reporting by Dan Goldberg
“Pauline Nel and her husband, Louis have decided that Australia is where they want to make a new life with their son Jannie, four, and daughter, Mia, two. They are moving to Sydney later this year.
They first visited Australia just over a year ago for a holiday and to see whether it was somewhere we could live. We visited Sydney, Adelaide and Melbourne to get an overview of each city. Louis grew up with a very outdoors lifestyle. In addition I suppose we have always known that England is not the only place to live your life.
Nel, 35, a company director with a background in human resources, said the toughest aspect has been the immigration process, which she describes as “a very long, arduous process”. She hopes the settling in will be made easier by the fact that her brother is already in Sydney, and their parents are currently applying for visas to join them.
Apart from the outdoor life and the climate, it is the work-life balance which especially appeals to Nel. “Work is just one part of your life. When you are finished, you go home and spend time with your family or do other activities. Also, the facilities there are much more affordable — you can go out for the day without spending a fortune, and there are beaches, mountains, parks, public barbecues you can use.”
She is also pragmatic about the future: “I’m under no illusions of us being financially better off, but I do believe our quality of life will be richer.”
The Nels and her parents, the Kellys, are all clients of Montfort International plc which is providing both visa and financial advice serves to them all.

Tax Haven Australia?

If you plan to retain UK assets when you migrate to Australia you need to be aware of your tax burden in both countries say migration finance experts Montfort International plc (www.miplc.co.uk).
Your Australian tax position for your foreign income is affected by your visa status. For instance a holder of a temporary contributory parent visa subclass 173 will benefit from most types of foreign income and capital gains not being assessable to Australian tax - such as UK pensions and gains arising upon sale of UK assets. On the other hand, the Australian Tax Office (ATO) would seek to tax the holder of a contributory parent visa subclass 143 on their worldwide income.
What with there being hundreds of visa permutations, one shouldn’t necessarily assume that local Australian advisers are as well-informed on whether you qualify for the foreign income exemption, meaning you may miss out on valuable tax benefits.
The good news is, migrating on a temporary visa can provide excellent tax planning opportunities. Provided you time the sequence of events correctly, you can dispose of assets without any liability to UK or Australian Capital Gains tax, as well as investing your capital to provide tax free income to you in Australia. These benefits coupled with the fact that there are no death duties in Australia, makes the Retirement Investor visa an attractive option for wealthy retirees. Montfort International’s holistic approach of providing integrated visa and financial advice is designed to enable our clients to maximize the tax benefits available to those migrating under a temporary visa.
Whatever your financial intentions, seeking advice from the qualified advisers at Montfort International by calling 01483 202072 or freephone 0800 018 3571 or emailing info@miplc.co.uk, before you finalise your migration plans can help you to a less taxing life ‘Down-under’.

When is giving advice not giving advice?

Montfort International has learnt that the interests of emigrants from the UK are of increasing concern tothe UK’s consumer watch-dog, the Financial Services Authority (FSA).
The FSA regulates the UK’s financial services businesses and is now looking closely at the advice migrants and returning nationals are receiving. The financial consequences of migration are not just the concern of the migrant. The FSA is charged with ensuring that the advice you get is quality advice, which should be supplied by those competent in financial matters appropriate to UK and the destination country.
There are concerns over those foreign advisers who say they are not giving UK advice when physically standing in front of you at a migration show in this country. Migrants need advice about what to do about investments, pensions, wills and UK mortgages. The response they seem keen to supply is “leave it all until you arrive in Australia”. That seems to be giving advice. Most countries assess your situation based upon what you arrive with! How do you optimise your position? The answer is to see a UK regulated firm and ensure you leave with the right financial arrangements in place.
If the adviser is not FSA regulated then he or she is far less accountable. (One can easily check - http://www.fsa.gov.uk/register/home.do) If they are not registered, where do you stand if it goes wrong? Probably in not too enviable a position – unless you fancy mounting an international legal challenge with all the associated costs. International tax specialists, accountants and lawyers do not come cheap.
In the Inland Revenue’s adverts, Professor Simon Scharma claims “Tax doesn’t have to be taxing.” To ensure this is so for you requires sound, pre-departure preparation - not post arrival damage limitation.
For individual, expert advice from an FSA registered firm (No 181199) call Montfort International free on 0800 018 3571 or email info@miplc.co.uk

Financial pitfalls can entrap migrants

There can be significant tax and financial issues for those leaving UK, but the weak pound is already making things tougher for those going to Australia, so they really can’t afford to pay unnecessary tax. However, only a handful of financial advisers, such as market leader Montfort international plc know the key to tax-effective restructuring.
Many migrants and returning nationals are vulnerable and disorientated. Together with all the excitement there is also apprehension about life in that strange new country. Who doesn’t have concerns? Are you aware that the date you leave will alter your tax position and that the type of visa and its date of issue will affect your tax, as well as have a follow on effect on your purse?
Migrants need advice and it’s not just pensions, for which a Qualifying Recognised Overseas Pension Scheme (QROPS) is a great way to
• access the benefits tax-free as a lump sum
• receive the funds before retirement
• protect your benefits from UK inheritance tax
• avoid the requirement to purchase an annuity
How do you avoid tax on the cash from house proceeds? What do you do about your wills and UK mortgages? Raising a mortgage to release capital won’t necessarily be tax effective unless you consider a change of ownership, and the list goes on. Who would think a repayment on a mortgage can create tax consequences?
In the Inland Revenue’s adverts, Professor Simon Scharma claims “Tax doesn’t have to be taxing.” To ensure this is so for you requires sound, pre-departure preparation - not post arrival damage limitation. Contact the experts at Montfort now to arrange a free initial consultation by calling free on 0800 018 3571 or visiting www.mipolc.co.uk

Trade body warns IFAs on QROPS

The Association of Independent Financial Advisers (AIFA) has this week warned its members to take care when recommending the use of Qualifying Recognised Overseas Pensions Schemes (QROPS).

The AIFA says in its latest newsletter “We would like to remind members who advise on pension transfers to QROPS to exercise caution when making such recommendations. It has come to our attention that UK residents with no intention of emigrating have been targeted by QROPS operating from the Channel Islands, Isle of Man and as far away as Hong Kong and Singapore with the assurance of having the full fund paid out as a lump sum at retirement. Should they go ahead and transfer funds, this could be considered an unauthorised payment and subject to a hefty tax charge. Furthermore, policyholders could be forced to repay the tax relief already received on their contributions.”

QROPS can be an extremely valuable means of maximising the value of UK pensions for those leaving its shores. However, as the AIFA warns, there can be huge pitfalls if they are mis-used. Montfort International plc, pioneers of UK pension transfers abroad for over a decade, were consulted by Her Majesty’s Revenue and Customs before the QROPS rules were finalised and remain leading experts in this specialist field.

Seeking advice from the qualified advisers at Montfort International (info@miplc.co.uk, call 01483 202072 or freephone 0800 018 3571) before finalising your migration plans can help you to a more comfortable retirement overseas without the risk of unwelcome financial shocks.