UK changes boost value of Aussie advisers
Changes to UK pension laws have highlighted the importance of Australian financial advisers for those transferring money from overseas, the technical head of a leading financial services organisation has said.
BT Financial Group head of technical Sue Merriman said such fund members should be prepared to “pay for decent advice” in order to minimise difficulties arising from new rules governing the overseas transfer of UK benefits.
“The rules do not prevent someone from transferring their super to any overseas fund, but they impose a hefty tax burden unless the overseas fund is a Qualifying Recognised Overseas Pension Scheme (QROPS),” Merriman said.
“Anybody contemplating bringing money from the UK should work through an experienced financial planner, especially one experienced in bringing money over from the UK,” she said.
According to Merriman, the ability to report information to the UK, such as when cash payments are made to members, is the key area funds need to “tweak” to qualify as a QROPS.
BT has announced that its Retirement Wrap fund (SuperWrap) is one of the first Australian superannuation funds to qualify.
According to Merriman, UK funds and members would suffer penalties when transferring benefits to a non-UK fund that was not a QROPS.
Additionally, if a member who initially transferred superannuation to an Australian QROPS fund subsequently rolled over to a non-QROPS Australian fund, they could still be liable for UK tax, she said.
Financial advisers thus have a substantial responsibility in helping members understand the implications of these new laws, she said.
“Whether or not the end benefit would be better if you leave the money in the UK, rather than transfer it … all those things are definitely in the realm of financial advice,” she said.
Recommended for you
Licensing regulation should prioritise consumer outcomes over institutional convenience, according to Assured Support, and the compliance firm has suggested an alternative framework to the “licensed and self-licensed” model.
The chair of the Platinum Capital listed investment company admits the vehicle “is at a crossroads” in its 31-year history, with both L1 Capital and Wilson Asset Management bidding to take over its investment management.
AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies.
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
