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Forward Thinking Magazine : August 2010
19 Australian advice on: i) Australian implications of leaving benefit in foreign jurisdiction: ■ benefit payment issues upon reaching payment phase: – taxation of pension payments – double tax agreement operation, assessable income, deductible amount – Social Security implications – currency exposure issues ■ FAF implications, if any ■ issues relating to ongoing benefit and investment advice ■ estate planning issues – accumulation and pension phase ■ foreign exchange management ii) Australian implications of transferring benefit to Australia ■ foreign superannuation fund benefit taxation implications – is transferring scheme a ‘foreign superannuation fund’? – taxation implications: – will foreign fund make payment directly to an Australian superannuation fund – growth since Australian residence began – 6 month rule – currency valuation (e.g. ATO Priv Ruling 94648) – personal taxation liability, or s 305-80 election for superannuation fund to pay tax ■ superannuation contribution cap issues: – fund cap and non-concessional contribution cap – strategies if benefit potentially exceeds caps ■ FIF or FAF tax issues: – has previous FIF interest and tax liability been declared? – attribution account tax offsets ■ (UK only) QROPS issues: – choice of Australian QROPS fund – benefit quarantining from Australian sourced funds – QROPS reporting period ■ replacement insurance upon transfer ■ integration with other financial planning arrangements - investment planning, retirement planning, estate planning, risk management, etc. Foreign jurisdiction advice on: ■ nature of the benefit – defined benefit, accumulation fund, etc – benefit accrual rates/steps for defined benefit schemes ■ investment make-up/profile, growth potential, member’s options/control ■ fee structure – ongoing, transfer, exit ■ investment return taxation implications – accumulation and pension phases ■ ancillary benefits – insurance, borrowing options, other benefits, etc ■ current access criteria, restrictions ■ retirement benefits – options (i.e . lump sums, pension types, guarantees, age limitations, capital access), projections, taxation implications, etc ■ ongoing monitoring, advice, associated costs ■ portability within jurisdiction – benefit and taxation implications ■ legislative risk ■ employer sponsored arrangement? (possibly relevant under proposed FAF rules?) ■ processing times/procedures for withdrawals – local and international ■ recommendations re international transfer, timing of transfer, etc – income tax, inheritance tax, other tax implications ■ estate planning implications.