Transferring Overseas Pension Funds to Australian Superannuation

Australian expatriates returning from abroad, or migrants moving to Australia, can transfer their pension fund balances intio Australian superannuation without attracting tax if the transfer is effected within 6 months of their becoming resident in Australia. Transfers completed after the 6 month period attract a tax of 15% on the growth in the value of the fund since residency - this is analogous to the tax that would be paid by a superannuation fund during that period. The tax is payable by the Australian receiving fund (at the election of the tax payer), whereas previously the growth was assessed as personal income and tax levied at marginal rates, up to 48.5%.

Much of the impetus behind pension transfers in very recent times has however been the recent changes to superannuation rules in Australia, most particularly those providing tax free status to certain income streams post age 60. While it may often be advantageous to transfer a pension into Australian superannuation, rather than receive a foreign pension taxed at your marginal tax rate, it does not mean this is always the case and you need to invest some time in carefully considering the issues in your particular situation.

The cost and complexity of transferring a pension in terms of your time, or an advisors, are not inconsequential. We deal with this matter in quite some detail in our section on pension transfers and have a service wherein the total transfer process is managed for AUD1800 inclusive of GST, or AUD1200 if an actuarial report is not required.

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