Australian advisers accused of scaremongering on UK pensions

Some Australian financial planners and superannuation funds have been accused of needlessly worrying British pension holders on the basis of misleading claims that United Kingdom pension transfers will cease on June 30 this year.

The managing director of British company Montfort International, Geraint Davies, said the misinformation had flowed from interpretations being applied to the 2006 Federal Budget removing the superannuation Reasonable Benefit Limit and the superannuation withdrawal tax.

Davies said the interpretation flowed from ambiguous wording that suggested the British Government would not allow transfers if the benefits were to be paid tax free in Australia.

He said some Australian advisers had been procuring business by “carefully contrived advertising campaigns to panic former UK residents and nationals into transferring their pension funds to Australia”.

Davies said that many migrants and former UK residents had been led to believe they were at the “last chance saloon” and that UK Revenue was about to slam the door shut.

He said this differed from information emanating from the UK Tax Office with the British authorities making clear that it had never intended to pursue a policy that would see UK pensions transfers banned.

“The legislation was, I agree, ambiguous,” Davies said.

“And its ambiguity was enough for some advisers and superannuation schemes to seize the opportunity and make misleading claims.”