Personal Pension  

Aussie Rops rules red-flagged

Aussie Rops rules red-flagged

HMRC’s rules for UK-Australian pension transfers have come under fire from specialists, who accuse the taxman of running a policy of “no checks, based only on trust”.

HMRC’s rules for UK-Australian pension transfers have come under fire from specialists, who accuse the taxman of running a policy of “no checks, based only on trust”.

Amid a rush of Australian recognised overseas pension funds (Rops) re-entering the UK tax office’s list following last year’s cull, there are concerns that not all of the schemes meet HMRC’s and the Australian Tax Office’s (ATO) rules.

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Geraint Davies, managing director at Montfort International, said the current situation “makes it extremely difficult for anyone in the UK to give advice to transfer to an Australian scheme”.

“We still feel most of these Australian schemes are not compliant with UK rules – they will say that they are compliant with Australian rules.”

A spokesperson for HMRC said the Rops notification list shows pension schemes that have notified HMRC they meet the requirements, have undertaken to provide information and have consented to appearing on the list.

Last year, the list of Australian Rops was slashed, as HMRC confirmed to the Australia’s Treasury its superannuation funds no longer complied with UK rules under the new pension age test.

After the initial reintroduction of Australian Rops to HMRC’s list, the number from the country now totals 137.

Nigel Darnley, technical services manager at London and Colonial, said transferring to an overseas scheme needed to be considered very carefully.

Funds that have the status ‘registered – not determined’ on the ATO’s search engine, are in limbo, he said, where Australia has not yet determined whether it is compliant or non-compliant, which can make a huge difference to retirees’ tax bills.

He added: “If it is compliant, the tax rate is 15 per cent; if it is non-compliant it is 45 per cent.

“It may be that the scheme is fine, but if for some reason it is different, then there is a 30 per cent tax difference.”

ruth.gillbe@ft.com