Advisers warned on UK pensions
Financial planners who have UK migrants on their books have been warned to take special care with their advice or face potential liti-gation in the future.
Financial planners who have UK migrants on their books have been warned to take special care with their advice or face potential liti-gation in the future.
The warning follows news that cases are currently in UK courts con-cerning advisers and information they supplied to immigrants in the lead up to their departure for Australia.
As a result, up to 500,000 Australians may be liable for unknown tax bill as a result of being linked to pension funds in the United King-dom coming under local capital gains tax laws.
In some cases, the tax figure has exceeded UK pension owed to a mi-grant. An expert in the area in the UK, Montfort International manag-ing director Geraint Davies, says the number of people involved is staggering.
"Consider that over a million people in Australia where born in the UK and official figures state 10,000 people immigrant to Australia per annum," Davies says.
Godfrey Pembroke principal consultant Clive Herrald says the hidden danger areas include advice on decisions to bring the funds onshore, and thus deal with UK and Australian tax laws.
Another area is informing clients of the need to notify the ATO of the existence of any non-transferred overseas funds.
Yet Herrald also emphasises there is great positive potential.
"British migrants normally have a pension scheme in the UK and usu-ally have other investments and there is a capital potential for Aus-tralian planners," Herrald says.
And for many recent arrivals dealing with their pension fund is a low priority after securing work and a residence, but Davies says it is almost too late after arrival to deal with the issue.
"This is specialist advice, it affects the 'Mums and Dads' market so Australian financial planners must research what these people have got because their client base is vulnerable."
AUTHOR
Jason Spits
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