When can I Transfer my UK Pension to NZ?

You shouldn’t transfer your pensions to New Zealand until you have settled there and decided that you want to stay, so this is a decision that you can defer indefinitely – actually until you have purchased an annuity, though most people sort out their UK pensions well before this!

Besides residence in New Zealand, the general conditions for pension transfers are:

• Many pensions can be transferred once drawdown has commenced, but not once an annuity has been purchased.

• The transfer payment must be made direct to the receiving pension scheme in New Zealand, which must be recognised by the UK HMRC as a Qualifying Recognised Overseas Pension Scheme (QROPS).

• Controlling directors of UK companies and high earners may need to apply to the UK Inland Revenue for permission to transfer their pension funds.

• If your pension fund is worth more than ₤1.5 million, you may need to apply for protected rights. Please contact us for more information if this is the case.

Is there a time limit for pension transfers to New Zealand?

You can only transfer your UK pensions once you have permanently emigrated from the UK. Some UK pension providers will insist upon you having NZ residency before they will allow the transfer to proceed.

You may have read that when Brits emigrate to Australia, they only have 6 months to complete their pension transfer in order to get the best tax savings. There is no such time limit when you transfer pension funds to New Zealand – as long as you transfer them before you purchase an annuity - so you can take your time to investigate your options and make the best decision for you.

Please note that once your pension is transferred to New Zealand, you cannot transfer it back to a UK pension fund. If you enter this investment before you have been outside the UK for 5 complete tax years, then return to live in the UK before you have been outside the UK for 5 years, you will need to leave your pension in a QROPS pension fund until you reach retirement age or be liable for a hefty UK tax charge.

Is there anything I should do before I leave the UK?

Whether your New Zealand emigration plans come to fruition or not, the tax advantages of putting as much as you can afford away into a UK pension while you are still living in the UK are clear.

You can even keep paying into your UK personal pensions once you are resident in New Zealand if you still have some UK income. This generally needs to be earned income rather than investment income. Under HMRC rules you only qualify for tax relief on pension contributions up to the ‘basic amount’ of ₤3,600 (in the 2009/10 tax year), and you are only eligible for this relief for five tax years after you leave the UK.

Some Brits we have come across have been advised to “consolidate” their UK personal and occupational pensions into a UK SIPP before they emigrate to New Zealand. This is not an essential step in transferring your pensions to New Zealand, and it is likely to incur unnecessary additional expenses.

Gathering your Paperwork

We recommend that you do not apply to your pension administrator for transfer values and paperwork for benefits you hold in UK company schemes until you arrive in New Zealand. In most cases they will only be valid for 3 months, so could almost be out of date before you arrive. Many UK pension schemes will not provide a second transfer value until a further year has passed, and they are likely to charge you a fee of around £300.

You can however request the transfer value and paperwork to transfer to an overseas scheme for benefits you hold in Personal Pensions, Stakeholder Pensions and pensions used for contracting out of S2P/SERPS before you arrive in New Zealand if you would like to, or we are happy to help you do this once you have arrived.

Read on for our Top Tips on getting the best result from your UK pension transfer.

Please fee free to contact us if you have any questions about your UK pensions, and don't forget to order your free copy of our comprehensive UK Pension Guide.