If you choose to be paid a pension from your personal UK pension scheme this amount will be fully taxable in New Zealand as income. Taking a regular income from your transferred funds is not deemed to be taxable income in New Zealand.

If you are outside the 4 year tax exemption rule and transfer your funds to New Zealand you will pay NZ tax on a percentage of the amount transferred. This amount is based on how long you have been a New Zealand tax resident.  It can still work out costing less by transferring your pension to New Zealand.

If you transfer your pension funds to NZ, they must be invested in a QROPS superannuation fund. Defined benefit schemes can only be transferred into a QROPS. At age 55, you can withdraw all of your money, but your funds need to be invested for two to three years (depending on the QROPS) to avoid early withdrawal fees.

You can avoid inheritance tax on your pension through a QROPS transfer. Death duty in New Zealand is currently zero rated. When you are retired, you can have your money professionally managed without worrying about it being savaged by inheritance tax in the UK in the event that you die prematurely.

The rules for pension transfers frequently change, and when they do they are usually less favourable to you. UK pension regulation can change such that future transfers may be prevented or limited.

The professional team at Lyfords will ensure you understand any HMRC QROPS changes when it comes to transferring your UK pension. Transfer now and avoid the risk of any future regulatory changes in the UK.

If you haven’t transferred your UK pension before you die, your spouse might be paid half of the pension you would have received from the UK (but not always).

If you both die, your pension dies with you, unless you are leaving qualifying dependent children. In this case, your UK pension could continue for as long as your plan fulfills the scheme’s eligibility criteria.

For clients who have transferred their UK Pension funds into a NZ QROPS, their whole investment portfolio becomes part of their estate and is passed on according to the instructions in their Will.

If you choose to receive a pension from the UK, it will be treated as 100% taxable income in NZ. Once you have transferred your funds into a New Zealand QROPS superannuation scheme, drawings are deemed to be capital and are not treated as taxable income.

This is no longer relevant.  The Lifetime Allowance charge was abolished entirely from 6th April 2024.

This has been replaced by the Overseas Transfer Allowance. This defines the maximum total value of your UK pension that you can transfer to a QROPS fund without incurring the Oversea Transfer Allowance tax.

From 6 April 2024 the Overseas Transfer Allowance is:

• £1,073,100
• Aligned with the standard lump sum and death benefit allowance
• Can be higher if you hold a valid Lifetime Allowance protections.

For amounts above the Overseas Transfer Allowance 25% tax is charged.

When you move to NZ, you have 4 years to transfer your pension without incurring tax on the transfer value. This is the Transitional Tax Residency period. If you transfer after 4 years tax is payable on a graduated scale. Even if you do have to pay tax on the transfer after the exemption period there are still very clear benefits in transferring your pension. The sooner you action a transfer the less tax you will need to pay.

Lyfords makes it easy for you to transfer your UK pension to New Zealand. We are skilled and experienced at dealing with all the red tape and requirements that the UK providers request.

The documents we send to you will be clear and simple. We will have done most of the work based on the information that you will have given us. You can have peace of mind that a professional is driving the transfer process for you.