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Having spent your entire adult life building up your funds, you deserve to enjoy them, however, and wherever, you’d like. But this is a major financial step and one that deserves careful consideration before it is taken.

From Brits who have settled in NZ, to Kiwis who have returned home after working in the UK, many have found that the pros of transferring their UK pensions over to New Zealand outweigh the cons.

To help you make a fully informed decision, and avoid any unexpected hiccups, in this article we’ll work to clarify the process and outline the most important considerations.

What should I consider before transferring my UK pension to NZ?

Before deciding to move your funds from the UK to New Zealand, ask yourself the following questions:

You should also familiarise yourself with Qualifying Recognised Overseas Pension Schemes, otherwise known as QROPS. In short, these are annuity-based funds, based in offshore financial centres, that can help you to transfer your UK pension to New Zealand in a quick, easy and tax-effective manner.

What are the pros and cons of transferring my UK pension to NZ?

Let’s start with the good news: there are a number of benefits that can come with transferring your UK pension to New Zealand, including:

There are however some potential drawbacks that come with transferring your UK pension to New Zealand, including:

Will my UK pension get taxed in NZ?

Your pension can be taken as either tax-paid income or a potentially tax-paid lump sum. If you leave your pension in the UK, you will be liable to pay NZ taxes on any income you take from it. If you bring your pension to NZ, there will be no NZ taxes to pay if it is transferred as a lump sum, provided:

Pension transfers and lump sum withdrawals from UK pensions are taxable in NZ beyond that four-year period. Depending on your residency and financial position, your tax liability is based on either the ‘schedule method’ or the ‘formula method’. The mathematics of this can quickly become complex, so at this point, it’s best to seek professional financial advice.

In terms of ongoing tax, NZ pension scheme growth and earnings are generally taxed at New Zealand's standard income tax rates which are dependent on your total income. Earnings on UK-based pension schemes and investments may also be liable for NZ’s Fair Dividend Rate tax. UK personal pensions, meanwhile, can grow almost tax-free (up to the Lifetime Allowance limit.)

Ultimately the control and opportunity that you gain from moving your funds over to NZ can make these higher taxes worth it, but you should carefully weigh up the consequences of such a move.

Ultimately the control and opportunity that you gain from moving your funds over to NZ can make these higher taxes worth it, but you should carefully weigh up the consequences of such a move.

Final thoughts

Retirement planning by itself is complicated enough, and that’s before the complexity and red tape of international finance is added to the mix. Nevertheless, bringing your pension over to NZ could represent a wise move that pays real dividends, both in terms of growth and control.

The combination of importance, opportunity and complexity make this a task worthy of professional assistance. It’s wise to speak with a financial adviser who specialises in these matters to ensure you’re not only doing things the right way, but in the way that is most beneficial to you.

In situations that deal with such large sums, a professional financial adviser will inevitably pay for themselves many times over.

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Dubai and Abu Dhabi in the United Arab Emirates (UAE) could soon join London, New York and Hong Kong in the world’s top 10 global financial centre rankings, thanks to new government laws affecting expatriates.

This is the bold message from Nigel Green, the founder and CEO of deVere Group. The observation comes as the UAE cabinet on Sunday approved new legislation that allows expatriates to remain in the country long after they retire.

Mr Green affirms: “Dubai and Abu Dhabi are perennially popular destinations for ambitious expatriates looking to embark upon or further their careers because of the incredible possibilities offered in terms of finance, trade and commerce, plus the famous ‘can do’ attitude and the low tax environment in these destinations.

“But they will become even more attractive locations for overseas talent thanks to the government passing these new laws that allow expats to stay on in the UAE long after they retire.”

He continues: “With Dubai and Abu Dhabi becoming ever-more appealing relocation destinations, recruiting more top talent here will inevitably become easier for companies that are based in these emirates.

“In addition, I believe that it will help drive further driving confidence in the UAE as a place for overseas firms to do business and invest.”

Mr Green goes on say: “Dubai is already recognised as one of the most powerful financial centres in the world. But this new legislation will not only galvanise this position, but significantly strengthen it.

“This confirms my view that over the next decade, we can expect it to become one of the world’s top ten international financial hubs to rival and more aggressively compete with stalwarts such as London, New York and Hong Kong.

“Dubai and Abu Dhabi are helped in this regard by having an independent regulator, an independent judicial system, a global financial exchange, a stable, pro-business government, a high proposition of high net worth individuals, a dynamic business community, world-class infrastructure and telecommunications, English as its defacto business language, and their enviable geographical location and time zone.”

The deVere CEO concludes: “We fully welcome this progressive policy shift by the UAE government. It will encourage even more people to come, stay and invest for the long-term in the country, which will further boost its sustainable economic growth.”

Earlier this year, Dubai was revealed as the number one city for graduates seeking a career in financial services, whilst London didn’t make the top ten, in an annual deVere Group survey.

Of the findings at the time, Mr Green noted: “This survey highlights that the next generation of financial services professionals are open to look beyond the traditional and more established global financial hubs.

“It underscores how cities like Dubai, Barcelona and Cape Town are increasingly important international financial centres.

“The fact that Barcelona this year is second-placed and London – currently the world’s most important global financial hub – does not make the top ten is interesting.

“Could it be that the respondents believe mainland Europe’s international financial centres offer more opportunities than post-Brexit London?”

(Source: deVere Group)

The estimated 1.8 million British expats living in the EU should consider reviewing their personal financial strategies as ‘no-deal’ Brexit looks increasingly likely, warns the deVere Group.

The warning from James Green, deVere Group’s divisional manager of Western Europe, comes after British Prime Minister Theresa May claimed that a no-deal Brexit “wouldn’t be the end of the world,” as she sought to downplay statements made by Chancellor Philip Hammond.

It also follows the UK government publishing last week its first technical notices advising businesses and consumers on the preparations being done for the prospect of there being no Brexit deal.

Mr Green comments: “A no-deal Brexit is now expected by a growing number of experts and the wider population to be the most likely outcome.

“If the UK crashes out of Europe with no deal in place, the estimated 1.8 million expats living in the EU could be financially impacted in two key ways.

“First, the pound would inevitably suffer and it could fall hard. This would deliver another heavy and serious blow for those who receive UK pensions or income in pounds as the cost of living, in effect, would be significantly more expensive.

“Second, unless there is considerable post-Brexit collaboration between the UK and EU there is a risk that existing payments from British companies, including pension and insurance companies, to those living within the European Economic Area (EEA) could be disrupted or even made impossible. Of course, this would be a major inconvenience to many UK expats.”

He continues: “Against this chaotic backdrop it is prudent that British expats in the EU consider reviewing their personal financial strategies sooner rather than later with a cross-border financial expert. This will help best position them not only to mitigate the risks of a no-deal Brexit, but also to enable them to take advantage of potential opportunities that may arise.”

Mr Green concludes: “Unfortunately, a smooth and orderly exit of the EU is looking increasingly unlikely and this can be expected to hit the finances of many expats.

“They should seek to make their financial strategies ‘no deal Brexit’ proof.”

(Source: deVere group)

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