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QROPS Documents

The below document service relates to the UK rules for Qualifying Recognised Overseas Pension Schemes (‘QROPS’).

For existing SMSFs, the pricing is as follows (inclusive of GST)

DescriptionSoftcopy *
SMSF Deed Update (QROPS) documentation — click to order$ 1,500 ^
*Add $75 for hard copy
^ The above fee does not include lodgement of the executed paperwork with HMRC

For new SMSFs, the pricing is as follows (inclusive of GST)

DescriptionSoftcopy *
New (QROPS) SMSF documentation — click to order$ 1,500 ^
New company (bundle price) — click to order$ 230
ASIC registration fee for the company (no GST) (from 1 July 2020)$ 506 #
Total$ 2,236
*Add $75 for hard copy
# As DBA Lawyers acts as agent for registration ASIC fee is not subject to GST
Pricing (apart from ASIC fees) includes GST
ASIC fee is indexed each 1 July
^ The above fee does not include lodgement of the executed paperwork with HMRC

NB: If you wish to order QROPS documents please use our standard ordering process for a new SMSF or an SMSF deed update and note in the special instructions that you would like a QROPS 55+ deed. The pricing in our online ordering system will be adjusted to reflect the above prices after you complete the order.

For individuals with money tied up in a UK-based pension scheme who would like to repatriate to their Australian SMSF, we offer a suite of SMSF documents that satisfy the QROPS standards set out by Her Majesty’s Revenue and Customs (‘HMRC’) both in relation to new SMSFs and existing SMSFs.

Broadly, HMRC do not accept that Australia’s superannuation law payment standards align with the UK’s standards unless membership of the fund is restricted to persons aged 55 years or over. Thus, the suite of documents prepared by DBA Lawyers is on the basis that all fund members are over 55.

Generally, UK pension schemes will release money to a QROPS fund, provided that the UK scheme is not an unfunded defined benefit or a state pension scheme. Thus, clients should discuss these aspects with their UK pension scheme provider prior to ordering the above documents.

What’s included

We supply comprehensive documents that comply with the standards set out by the HMRC including:

  • a deed to allow the fund to comply with the UK regulations;
  • trustee resolutions;
  • a covering letter to be sent to HMRC;
  • a letter detailing what is to be provided to HMRC;
  • detailed guidance on completing APSS251 (the notification form that must be submitted to HMRC).

Related advice services

The above prices are for QROPS documents only and does not include advice, meetings or other attendances. Naturally, we would also be pleased to advise on the Australian superannuation and tax rules where clients are seeking to:

  • obtain advice on the tax treatment of overseas super benefits and pensions received by a resident in Australia;
  • use their SMSF to invest in overseas property/assets;
  • transfer foreign super to Australia without adverse tax consequences; or
  • relocate overseas and maintain their SMSF as a (resident) Australian superannuation fund.

Please contact one of our lawyers if you wish to obtain advice.

Tax advice on foreign fund roll-overs

Generally the residual growth in the foreign fund since the relevant taxpayer became an Australian tax resident is assessable personally (ie, taxed at individual marginal tax rates) unless the transfer occurs within a six-month window of becoming an Australian tax resident or ceasing foreign employment. However, there is an option to elect to have this growth amount known as ‘applicable fund earnings’ taxable to the SMSF (at a 15% rate of tax) under s 305-80 of the Income Tax Assessment Act 1997 (Cth).

The starting point is that a transfer of money from a foreign superannuation fund (‘FSF’) to Australia (eg, to an Australian SMSF) will be subject to Australian income tax on any growth in the FSF that has accrued in that foreign fund in respect of a member since the date of the member’s Australian tax residency commenced, unless the transfer occurred within six months of residency or cessation of foreign employment.

This is subject to certain adjustments for:

  • periods of non-Australian tax residency;
  • contributions made to the FSF post-Australian tax residency; or
  • transfers into the FSF from another FSF post-Australian tax residency.

The other key hurdle is determining whether a foreign pension, superannuation or retirement arrangement will qualify as a FSF as the concessions in sub-div 305‑B of the Income Tax Assessment Act 1997 (Cth) (‘ITAA 1997’) do not apply in relation to many overseas jurisdictions.

Accordingly, where a sum of money is transferred from a FSF to Australia, the law broadly distinguishes between the (vested) amount in the FSF at the time of Australian tax residency and any residual amount (ie, the growth amount) that has accrued since that time.

In broad terms, the principal amount may be treated as non-assessable non-exempt income for the individual taxpayer and counted towards a member’s non-concessional contributions caps on transfer to an Australian superannuation fund. Naturally, this is subject to the member’s eligibility to contribute, and if the already member holds more than AUD $1.6 million in Australian superannuation funds (ie, on the 30 June prior to the roll-over), excess contribution issues may arise that will require careful consideration.

In contrast, the growth amount (applicable fund earnings or ‘AFE’) is included in the member’s personal assessable income, unless certain conditions are satisfied for the AFE to be taxed to an Australian superannuation fund as part of a FSF roll-over.

More specifically it may be possible for the AFE amount to be taxed to an SMSF at a 15% tax rate. Naturally, AFE being taxed to a fund at 15% may provide a better tax outcome than being taxed at the usual marginal tax rates plus the Medicare levy.

The legislation here is complex and there is little ATO guidance on how the provisions in the ITAA 1997 operate in a number of circumstances. Accordingly, we are often engaged to prepare advice and prepare private ruling applications to the ATO. For more information, please click here.

SMSF residency

Where one or more SMSF members relocate overseas there may be significant tax consequences for the fund. In particular, if a fund has overseas members and careful consideration has not been given to the structure of the fund, trustee-level decision-making and contribution planning, the fund may automatically lose its complying status. Similarly, if an SMSF becomes non-resident almost half of the value of the SMSF can be lost in tax. This is because a 45% tax can be imposed on an SMSF’s assets apart from a certain tax free amount when they cease to be an Australian superannuation fund.

To ensure this does not happen, it is critical that the SMSFs satisfy all of the residency rules that apply under the definition of an ‘Australian superannuation fund’.

DBA Lawyers can assist SMSF trustees and advisers in navigating the complex SMSF residency rules. We can provide advice and documentation. Moreover, click here for an article on SMSF residency and click here for further information on DBA Lawyers’ SMSF Residency Kit.

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