Siouxie

Then why not give a full explanation as to why you think that?

Give your thoughts on what constitutes the PRO's and CON's - isn't it subjective, to a degree?

Otto The Squid

There are so many issues on that website, it would take ages. For example, the incorrect LTA, misinformation about Inheritance Tax and pensions(to promote QROPS), not stating how the LTA charge works properly, UK SIPPs can invest in other currencies, there is no compulsion to buy an annuity with a UK pension,using offshore bonds is not the way to access the best prices for funds and so on....

This statement is just wrong "International SIPPs offer a wider range of investment funds which are more globally focused. This is in contrast to domestic SIPPs, where fund choices are more limited to the UK and are also denominated in Sterling."

He has missed one of the potential benefits of transferring a QROPS to a SIPP if the expat returns ( relating to the LTA for larger funds).

Siouxie

Brilliant Thanks so much!

Sorry if I appeared 'snippy' - many apologies... it's not intentional..

Otto The Squid

Sort of related to this, but specifically to those resident in Canada that have/want to transfer a final salary pension to a SIPP (personal pension).

I have been reading a UK IFA FB forum (UK pension specialists discussion about final salary pension transfers for those resident in Canada). I am pasting two comments ( One from an ex-President of the Personal Finance Society- Chartered member and one from a well-known IFA firm that specialise in dealing with expats, ie both know what they are talking about ).

I cannot comment on tax issues and pensions in Canada but, given what they have said, thought it may be worth posting here.

An IFA was asking if anyone had dealt with a final salary pension transfer for a resident in Canada.

Answers..

1. "My suggestion would be that client seeks tax advice on this first as my understanding is that the transfer from such scheme to a sipp is a taxable event in Canada."

2, "Moving the CETV is seen as a distribution- ie income and fully taxable. Until Canada recognises PPP it will remain so. There are people advertising they can transfer to SIPP but this involves the client in non disclosure"

If true, then are those that transferred could be sitting on a tax timebomb. If not true then fine, but it may be a good idea for people living in Canada to speak to a local tax adviser if they are considering a transfer from a final salary scheme before they transfer( or check if they have a liability if they have already done so. Remember, many of those peddling pension transfers outside the UK have limited knowledge about pensions and tax.

pumbers

Can I ask who the "well-known IFA firm that specialise in dealing with expats" is? I've hunted for months for such a company but have had zero luck so far, other than Alexander Peter Wealth Management, who frankly I'm not sure of.

Otto The Squid

Would prefer not to give out names of IFA firms on here, they are competitors and a firm I have worked with in the past. I merely wanted to make the point that I would expect both to know what they are talking about and warn people to double check with an accountant in Canada.

Gillo

shelley748

I transferred my NatWest pension to BMO Nesbitt Burns about 4 years ago and I have been very happy with my advisor.

CliveSD

Firstly, there is no way QROPS will ever be available in Canada again. Canadian pensions do not comply with HMRC access rules so QROPS will never be reinstated. A SIPP is the only pension you can use. You cannot use most UK SIPP companies (like Hargreaves Lansdown) or Platforms (like Nucleus) because they do not allow applications from abroad, so you do need to use Momentum or similar. I have had a Momentum SIPP for 10 years and they are fine! There are 2 options for an investment vehicle in the SIPP. A Bond or a Platform. These need to be International so ARE more expensive than the typical UK versions.
OMI are good, probably the biggest in the market, possibly not the best. They typically pay 7% commission up front on a standard charging structure of 0.95% for 10 years. Their disadvantage is they also charge 0.2% of fund value forever (after the 10 years). The Bond helps spread the advice costs over 10 years, but some Advisers reduce this and depending on the total value of the portfolio you can expect to half the cost at the top end. A Platform may look to be a lower annual cost, at say 0.45% pa but this is forever and includes no advice fees up front or ongoing and a typical £3-5,000 plus UK Report cost of £2-3,000 will be payable on top of the Platform. Hope this helps? Happy to clarify any points if required. I'm new to forums so not totally sure how this goes!

Otto The Squid

Canada QROPS are back on the HMRC list. Momentum, as far as I am aware (and according to the FCA register) have been regulated since 2014 and so how did you manage to have one of their SIPPs for so long?

Many UK SIPP providers allow non-UK residents to apply. The likes of Momentum just add substantial trustee fees to the pension as there is still the need for a platform (Why does the platform need to be "international"? Why not use an FCA regulated platform?). An insurance bond is totally unsuitable for any pension, especially one with 10 year lock-ins and high surrender penalties, and particularly so in the decumulation phase as they are non-income producing assets. How anyone can think that 7% is an acceptable level of commission for a pension is beyond me.
BTW, you can get platforms that charge 0.2% pa from day one. The one you are quoting, at a guess, is Novia Global .

Siouxie

Welcome to BE - and the Canada forums - are you living in Canada or hoping to?

Incorrect I'm afraid. There are ROPS for Canada now - we are back on the lists.https://www.gov.uk/guidance/check-th...on-list#canada

Otto The Squid

I suspect he/she has just finished the 5 day "become a financial adviser" course.

CliveSD

Hi, and thanks for the input. I stand corrected re 2 QROPS which are now on HMRC website, it would be interesting to see what restrictions the schemes have to meet the rules, however, I feel its a mute point Otto, as the 25% tax penalty makes then untenable! You are also right about Momentum as my SIPP started life as a Calderwood ProSIPP and renamed Momentum ProSIPP when they merged, but it is over 10 years old!
I would be interested to know which UK SIPP providers allow non-residents to apply, as I have struggled to find one and certainly agree the £500 pa for Momentum is not cheap. With regards the Bond, I didnt say 7% was acceptable, merely that this is the rate paid based on a 0.95% 10 year charge by OMI. You can certainly get it cheaper (if you ask or search around) and it is then similar to 3 Platforms I know of that charge 0.45% (Yes, Novia is one of them, and they charge £300pa for the SIPP) but you WILL still have to pay for advice on top. So a good adviser will do the maths for you and compare the Reduction in Yield between all the various/possible products that suit your personal circumstances and offer a choice of options. This is because some people prefer to pay a fee but others do not, and having the pension pay the costs spread over time suits them. Horses for courses!
BTW, I'd love to know the Platform that only charges 0.2% for non-uk residents - I pay 0.3% on another SIPP and I'm resident! So come on Otto, dont be a damp Squib, where can we all get it so cheap?

Otto The Squid

Restrictions? They would have to meet HMRC rules for recognition.

What 25% tax penalty are you referring to? This is about residents in Canada and, if the investor is in the same territory as the QROPS, there is no OTC applied. So, not a moot point.

You sell these products, as is clear from the way you describe them, so do your own research. You may find you need to be FCA regulated to have access to the whole UK SIPP market, however. Lots of providers will accept non- UK residents.

A good adviser will not put client's pension funds into an insurance policy, they are absolutely unsuitable for pensions although non-UK advisers seem to love them for some reason ( Commission? ). Also, the adviser should actually provide specific recommendations and take responsibility for them and not "offer a choice of options" for the client to make the decision. Adviser fees are far more transparent and can be paid from the transfer itself.

You say you are resident. Resident where? ( I am not interested really, it was an odd thing to say)

CliveSD

Maybe I have mis-understood the idea of this forum, as I thought the idea was to help people with queries they have and not for others to argue over each point. I was trying to be constructive and assist with a query. The restriction point, for example, is that HMRC added age restrictions when the same situation arose in Australia and people need to understand the rules are not the same as Canadian pension rules.However, you are right, I do advise in this area (and others) but your comment about a 5-day course is just 35 years out and I am fully UK qualified. Don’t forget that transfers with guarantees required qualified UK advice, so some firms do have access to the whole market, but I still don’t know of a platform provider charging 0.2% to non-residents, so in the spirit of the forum, if you do, why not share the info with everyone as the argumentative path on every point isn’t really going to help people.Certainly, insurance Bonds are used for commission and I stated that clearly, but this is disclosed as per FCA and Isle of Man regulations and they get a choice of fees or commission. As I said ‘horses for courses’ and my experience is that half of people choose commission when it’s done properly, because not everyone likes up front fees.