The Importance of New Zealand Pension Advice

For many years UK pension fund members, migrating to New Zealand, have been transferring their funds to New Zealand superannuation schemes, with little or no
New Zealand Pension advice.

However, with some key changes to the rules on taxing investments in New Zealand, fluctuations in the exchange rate and further communications from HMR&C, New Zealand pension advice, pre-migration, is more important than ever.

Changes Effecting New Zealand Pension Advice
The first legislation change was Portfolio Investment Entities, introduced in New Zealand on 1st October 2007. Their introduction had an enormous impact on New Zealand pension advice because of the tax payable on the growth was potentially reduced for lower income tax paying members.

The introduction of the Fair Dividend Rate (FDR) – a new method of taxing offshore shares held in New Zealand schemes, also influences New Zealand Pension advice. As did the advent of the Kiwi Saver, which is a non-compulsory Employer’s pension scheme, for New Zealand residents effective from 1st July 2007 – will these schemes be Qualifying Recognized Overseas Pension Schemes (QROPS) capable of receiving UK pension transfers?

Exchange Rate
The exchange rate also has an influence on both the UK and New Zealand pension advice. Throughout the early half of 2008, the exchange rate between the New Zealand dollar and the pound sterling has not been positive for those transferring pensions.
Those not taking both UK and New Zealand pension advice may miss out on locking in at a good exchange rate when transferring their UK funds.

Experts at Montfort International plc offer potential migrants free initial consultations at its Surrey Head Office or at locations around Britain. For an informal chat call 01483 202072, freephone 0800 018 3571 or email info@miplc.co.uk.

UK Pension Transfers to Australia

Following last month’s u-turn by the Australian government regarding superannuation funds, temporary visa holders are again looking at transferring their pension funds to Australia.

Previously, the Australian government had proposed that temporary visa holder’s superannuation funds be held by the Australian Tax Office until the granting of a permanent visa. As a result, Montfort International had advised temporary visa holders that they should suspend their UK pension transfers to Australia until the consultation process had completed.

The consultation process has resulted in a new approach allowing for funds to remain invested in superannuation while the person is resident in Australia. As such, we are now advising temporary residents to reassess whether their UK Pension entitlements should be transferred to Australia.

In addition to uncertainty over the government’s proposals many migrants have deferred transferring their benefits to Australia due to the strength of the Australian Dollar.

Montfort International can assist clients who are concerned about exchange rate fluctuations by first transferring their pension into an arrangement which has its own bank account. This could be used to convert your investment to Australian Dollars when you are happy with the exchange rate. Any onward transfer to Australia would then be in Australian Dollars. As we have seen in the past week with the pound regaining some ground against the dollar, the exchange rate can move quickly, and this strategy ensures you would not be adversely affected by any exchange rate fluctuations at the date of transfer.

If you wish to find out more about UK Pension transfers to Australia please contact Montfort International - info@miplc.co.uk.