Australia wants more immigrants

On 30th July 2008 Andrew Metcalfe, Secretary, Department of Immigration and Citizenship told the Australian Government Policy Evolution Conference at Canberra that in the last financial year (1/7/2007 – 30/6/2008) over 158,000 migrant visas were granted including 110,000 visas for temporary skilled work. Citizenship was granted to nearly 170,000 people.
His Department wants the migration program to supply skilled labour so that economic growth can continue within “a longer term framework for migration in the context of future labour market and demographic needs”.
The Migration Program for the current year (July 08- June 09) increases to 190,000 places, which makes it the largest program ever. The skilled migration component will make up 133,500 places, the largest ever and a 30 per cent increase on last year's program. The family stream will also grow by 6,500 places to total 56,500 places.
If your intention is to take advantage of the increasing number of opportunities to migrate to Australia, seek advice early from the qualified visa and financial experts at Montfort International http://www.miplc.co.uk/integrated_visa_financial_advice.html (info@miplc.co.uk, call 01483 202072 or freephone 0800 018 3571).

QROPS Benefits

Her Majesty’s Revenue and Customs (HMRC) in the UK allows individuals moving abroad to transfer their UK pension funds to Qualifying Recognised Overseas Pensions Schemes (QROPS).
The primary reason for transferring funds is that the UK pension scheme member has permanently migrated overseas. If possible, pension funds should move to a suitable QROPS arrangement in the client’s new home country too.
The main attractions of a QROPS over a UK scheme are
· the flexibility in taking benefits from the fund. One of the major drawbacks of the UK pension system is the requirement to purchase an annuity or income stream with the majority of the pension fund. Many pension schemes throughout the world that are approved by HMRC as QROPS are based in jurisdictions where the local tax rules do not require an income stream to be paid to the member at retirement. This level of flexibility appeals to migrants who do not wish for their benefits to be dripped out of their schemes over a long period of time.
· UK pension scheme’s widow’s and dependants benefits can be equally restrictive. By transferring funds into the right QROPS there could be lump sum benefits available for dependants on death as well as avoiding UK inheritance tax (IHT) on the fund as a QROPS falls outside the UK IHT regime.
· QROPS also appeals to potential migrants and returning foreign nationals, whose UK funds are approaching the Lifetime Allowance (currently £1.65 Million in tax year 2008/09). In the UK a 40% tax is imposed on the crystallisation of an individual’s UK pension rights exceeding the Lifetime Allowance. In many cases this limit can be exceeded simply with investment growth. By transferring to a QROPS, an individual can avoid this pension charge completely as once the funds enter the QROPS they cease to be considered UK pension rights.
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.

The Pitfalls of QROPS

Although a migrant may gain many benefits from transferring their UK pension funds to a Qualifying Recognised Overseas Pensions Scheme (QROPS) Her Majesty’s Revenue and Customs (HMRC) have legislation in the UK that has to be followed, by both the QROPS scheme and the member.
If the HMRC rules are not followed the member could find themselves subject to heavy UK tax charges with sanctions can being imposed on the QROPS scheme.
Although local rules may allow a QROPS to pay lump sum benefits to its members, a transfer of UK pension funds to that scheme does not automatically mean the UK pension funds are immediately subject to the local rules of the scheme.
As part of the conditions of becoming a QROPS and being able to receive transferred UK pension funds, the Overseas Scheme, when registering with HMRC, must agree to report any payments made from the scheme to the member for the first 5 complete UK tax years of the member’s overseas residency. This period is known as the ‘Reporting Period’.
During the Reporting Period, payments to the member must not exceed the allowable UK Government Actuary’s Department limits and must not be made to the member before retirement age 50 (increasing to age 55 on 6th April 2010).
This means that someone migrating today can not transfer their funds to a QROPS and take their benefits as an entire lump sum immediately – regardless as to what the local rules allow. (HMRC have investigated many QROPS in Singapore and have removed their approval, presumably because they have not being following the UK rules.)
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.