Qrops

[boydcroft]

I have searched but can't find anything recent on this. My partner and I have pensions sat in SIPP in the UK and want to transfer to NZ but retain in £ Sterling until the exchange rate improves (here's hoping).

FYI. Been in NZ for 20 months, so our understanding is we've got 2 and a bit years to transfer without being taxed by NZ IRD.

Any recommendations for advisers that don't charge extortionate rates? I really don't want to pay a % just to transfer but understand good advisers will charge a nominal % for managing the investments.

Also, any ideas once converted to NZ$ if the funds can be transferred into Kiwisaver? Not saying that's what we'd do as it depends on if it would be the right move, just curious.

Cheers,
Nick & Mandy

[dede]

I have searched but can't find anything recent on this. My partner and I have pensions sat in SIPP in the UK and want to transfer to NZ but retain in £ Sterling until the exchange rate improves (here's hoping).

FYI. Been in NZ for 20 months, so our understanding is we've got 2 and a bit years to transfer without being taxed by NZ IRD.

Any recommendations for advisers that don't charge extortionate rates? I really don't want to pay a % just to transfer but understand good advisers will charge a nominal % for managing the investments.

Also, any ideas once converted to NZ$ if the funds can be transferred into Kiwisaver? Not saying that's what we'd do as it depends on if it would be the right move, just curious.

Cheers,
Nick & Mandy

Look up gmi.co.nz. They are a QROPS provider and they will do the transfer for free. Nothing to stop you moving assets between QROPs providers thereafter I *believe* but it is a very good idea to get advice. The funds can be put into kiwisaver or a superannuation scheme but if super there are new rules as to how you much you can take out as a lump sum and how much needs to be put into an income for life...hth.

[Delta_Cephei]

Just seen this thread. When transferring over you should not get the funds put into a kiwi saver, even if it is qrops. This is because any withdrawal from kiwi saver at any point would breach uk tax law and cause a 55% tax bill! even if you were only withdrawing funds that you had placed into the scheme before the transfer. Plus funds can only be accessed from 65.

It is safer to put into a qrops scheme and leave. At 55 you are able to withdraw a lump sum (which is how we are planning to pay off our mortgage,once we get one),

Regarding fees- one company has suggested a fixed %, which can be taken from the transfer amount without breaching the uk tax law.
However, another has suggested a similar % then 1% of outstanding balance for the rest of my life. Has anyone else come across this? Why would anyone give away so much? Also- how can people satisfy their NZ tax obligations without triggering the uk tax withdrawal rule- where early withdrawals mean having to pay 55% of the total value.

[Super_BQ]

Also- how can people satisfy their NZ tax obligations without triggering the uk tax withdrawal rule- where early withdrawals mean having to pay 55% of the total value.

New migrants to NZ would be eligible for NZ's 4 year tax exemption status so there's no NZ tax obligation during that period on NZ's end. What ever tax pays at the UK end is the person's own responsibility.

[boydcroft]

Thanks for more responses. We're almost at the end of year 2 of the 4 year NZ exemption.
We certainly need to consider the Kiwisaver, UK tax penalty.

Main issue is we would prefer to keep the funds in GBP rather than convert straight to NZ$. Exchange rate isn't in the best of shape presently. I see the GMI superannuation will convert the funds immediately into NZ$, so this limits the timing options somewhat. Yeah we've got another couple of years to transfer but rather get it into NZ preferably as GBP to start the UK tax withdrawal clock ticking.

Anyone have rough estimates of how long the process takes once forms are completed?

Also, any info about transferring and keeping it in GBP and contacts that con do this?

Many thanks,
Nick & Mandy

[Clappy]

Anyone have rough estimates of how long the process takes once forms are completed?

We moved over four different schemes and there was a significant variance in the timeframes between the different UK Pension companies.

We had one SIPP with a well known provider that is based in Bristol. The online accounts provided the facility to see the trades as they were placed and settled so I could follow what was going on.

I dropped the signed forms at the QROPS provider's office in Auckland on a Tuesday morning. The paperwork was received at the SIPP office in Bristol on Friday afternoon and they started placing the sell transactions at that point. They finished placing the trades on Tuesday, the deals were settled the following Friday and my QROPS provider in New Zealand received the funds the following Tuesday.

We had another scheme with a more traditional provider and it took them four months to send the funds through despite repeated chasing up from the QROPS provider.

[catt]

This company are currently advertising i gave them a call about our pensions and they were pretty good and the initial advice cost me nothing. http://www.ukpensionstonz.com/

[dede]

I put mine into Kiwisaver and my provider (who, full disclosure I work for) did all the paperwork....as i) I won't need at 55 and ii) I can take the whole amount out at 65. If you choose the Super, you can only take out about 30% as a lump sum. The rest has to be "income for life". In practice because there are few annuities in NZ, that means using longevity tables and hoping that the IRD accepts the withdrawal rate. Be very careful with operators who i) charge large transfer fees as a number of QROPs providers will do it for free and ii) they may use FX brokers who don't give decent rates on the conversion. Repeat, you can transfer for free into a few of the QROP fund managers with decent FX and then transfer to any provider you like as long as they are QROPS providers.

[dede]

Took me about 3 months. The UK providers have 3 months from the receipt of all forms I believe....but they often need hand-holding I'm told. Agree on the FX rate; you have to be ready to accept that rate and some of the other providers can put you into STG funds - albeit you might pay a big up front fee vs. doing it for free on the fund management houses. For me it was the capitalization of the funds I liked, taking assets out of the UK which is no longer our domicile for IHT. The reason that capital values are so high is that interest rates are lower in the UK than NZ - which partially explains why sterling has been so weak. So its swings and roundabouts, really.