Under the guidelines set out last week, temporary residents’ superannuation will be allowed to grow in the superannuation fund for the entire time the person is residing in Australia.
Minister for superannuation and corporate law Nick Sherry says: “This new approach produces a fairer outcome for temporary residents as their superannuation will remain in their fund while they are in Australia rather than being swept out annually and they will continue to be able to take their superannuation with them when they depart.”
Montfort International managing director Geraint Davies says the move clears up some issues on Qrops’ transfers into Australia but significant issues remain for temporary Australian residents and he is concerned about the quality of financial advice available in the UK for those looking to transfer their pensions abroad.
He says: “UK financial advisers are not equipped to interpret the rules reference visas for Australia or of any other country. What is now forced on any UK adviser is the absolute necessity for not just the highest-quality financial fact-finding but the requirement of the highest-quality visa fact-finding.”
The changes are aimed at delivering a significant reduction in compliance costs for the industry and will allow for insurance cover of temporary residents as they will continue to be fund members while residing in Australia.