Are you planning to live in New Zealand soon as a retiree? If your accumulated savings are in the UK, you may find it necessary to transfer them to a New Zealand-based Qualified Recognized Overseas Pension Scheme (QROPS). According to the latest HM Revenue and Customs (HMRC) rules, you are allowed to transfer UK pension to New Zealand and to access the pension pot provided you’ve reached 55 years.
Nevertheless, the new regulations insist that you should continue staying in NZ for at least 5 years after the pension transfer so as to avoid a 25% tax impose if you decide to relocate. Usually, a New Zealand QROPS faces no income taxation ate pension age. There is also no tax imposed on pension growth and death of the pensioner.
The Process
Are you a bonafide member of a UK salary scheme, an occupational pension plan, or a Defined Benefit plan? If you have any of the three schemes and you are planning to retire in New Zealand, you can comfortably transfer your benefits to a New Zealand QROPS. In case you don’t have any of the three pension plans but have the Defined Contribution Plan, you can still transfer your pension. As mentioned earlier, you have to stay in NZ for at least 5 years to avoid the 25% tax. After 5 years, you can move elsewhere without paying the exit tax.
You should be aware that a New Zealand QROPS is a neutral jurisdiction platform when it comes to matters pension taxation. Therefore, you are not exposed to the UK taxation after making the transfer and when you are a resident of NZ for more than five years. But if you choose to retire somewhere else before the five-year term elapses, perhaps Australia, you can opt to pay the exit tax or transfer your pension to a QROPS of the country you are relocating to.
Final Thoughts
Generally, you stand to gain two things if you transfer UK pension to New Zealand through the QROPS path. One, you are able to stay in NZ for five years or more without paying the 25% tax. Secondly, after five years, you can relocate to a different country tax-free. Provided you comply with the latest HMRC rules, you can comfortably move your pension from the UK to NZ. In case you are still confused about the process, you can contact local QROPS specialists to help you complete the pension transfer to New Zealand. They will also help you choose the best QROPS that suits your current situation or needs.
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