SIPP that allows share or fund buying after leaving the UK?

muze77

Dear all,
Does anyone know of a UK SIPP provider that will allow people who move to the EU later (before retirement) to continue buying  shares through the SIPP?
I know for example that Fidelity does not like it, Hargreaves I am not 100% sure, I checked some others but it was unclear.

I just thought if someone here is in a similar position and has already checked with their provider, we could perhaps signpost this here? Then people have a place to start, if they want to start a new SIPP or transfer an old one, if they know they might migrate away from the UK in the future...They can then double check with the provider just before opening an account. But since there are so many providers, at the moment I feel it is looking for a needle in a haystack!

Also, ideally, such a provider would not mind considering the person leaving a 'relevant UK individual' for UK tax purposes for five years, so that this person will still be allowed to transfer 2880 per year into the SIPP for five years after leaving the UK. Even though HMRC allows this (*), many providers do not want the administrative hassle.
*I am not allowed to post links but look up ptm044100 and scroll down to member moves overseas


Edit: I did a search before posting but did not find anything. Also, I realise that things might change after the details of a Brexit deal are clear.

muze77

So Fidelity and Vanguard are out because they say this: 
Vanguard: "Please note that, if you move abroad, we reserve the right to place restrictions on your account. This may mean that you are prevented from making additional investments or switching existing holdings into other funds."
Fidelity: "There would be restrictions on your account if you move overseas. These include limitations to dealing, as you will only be able to sell to cash or withdraw money from your account. There will also be restrictions on your ability to use some of the tools and facilities on the website."
Hargreaves:
"You can continue to hold the same investments and do not need to sell or make any changes to your current investments. However, you won’t be able to buy UK Authorised funds that are only available to UK based investors."

"If you move to the EEA you won’t be able to buy any new units in UK Authorised funds. You’ll still be able to hold your current units or sell them and if you make a regular contribution into a UK Authorised fund this can continue.

You’ll also still be able to buy listed shares and other investments like investment trusts, bonds and ETFs. You might also be able to buy units in funds authorised in the EU (highlighted as offshore funds in our fund finder)."

• Anyone have any ideas as to whom would allow new buying of a wide range of shares and funds and other products whilst abroad?
• Also, who would allow continued contributions of 2880 GBP (3600 net) for five years as a relevant UK individual? Vanguard says no to that saying EU rules trump HMRC rules.

dunstonh

Does anyone know of a UK SIPP provider that will allow people who move to the EU later (before retirement) to continue buying  shares through the SIPP?

As the UK is losing passporting permissions under Brexit, restrictions will be in place on what can and cannot be done after 1st Jan.

For full functionality to continue, the SIPP provider would need to open an office in the country you would be resident in and gain permissions in that country.  EU wide rules cannot apply. it would require 27 new offices to continue offering full functionality across the EU after 1st Jan. 

Assuming no overseas branch exists, existing accounts can continue as they are and be drawn on and you can sell out of positions but you cannot buy into new positions (so no fund switches unless its into cash).    If you return to the UK, you can give an instruction in the UK on a face to face basis and it can be acted on (although SIPP providers may not allow it directly as they don't offer face to face meetings).

Edit: I did a search before posting but did not find anything. Also, I realise that things might change after the details of a Brexit deal are clear.

The Brexit deal does not cover retail financial services.

Also, ideally, such a provider would not mind considering the person leaving a 'relevant UK individual' for UK tax purposes for five years, so that this person will still be allowed to transfer 2880 per year into the SIPP for five years after leaving the UK. Even though HMRC allows this (*), many providers do not want the administrative hassle.
*I am not allowed to post links but look up ptm044100 and scroll down to member moves overseas

Just because HMRC allow it does not mean the EU will.  However, if you got on a plane to the UK and did it face to face with a provider or intermediary, then it is allowed.

muze77

Many thanks dunstonh! I completely forgot about the passporting rights issue. The restrictions I was thinking of (that I quote from the t&c in the 2nd post) were already in place a few years ago, I had not realised it would get worse with no one being able to allow the 2880 (gross 3600) a year transfer! Perhaps I will have to jump on a plane then, although it is not much, I don't have another private pension. I guess me and anyone wanting to do this would have to find an intermediary who is reasonable about fees for this amount.

Wait, the more I think about this, the less it makes sense to me. You are saying any contribution made by a relevant individual now needs to be both 'advised' and done whilst in the UK. But presumably not whilst being tax resident since you are  talking about just jumping on a plane. None of these changes are enacted in a new UK tax law yet (?), so I presume you are saying the EU wants the contributions to be advised and made whilst in the UK? 

Do you have any reference to either UK law or UK guidance or EU regulations that talk about the 'advised' part being needed?  Because I do not understand why at the moment, it seems a relevant individual can move to Australia and still remain relevant and still pay into a SIPP unadvised? That would point to the UK allowing someone outside the EU (if not US) staying a relevant individual? So the problem lies with the EU I get from your post, but where exactly does the 'UK based advise' solve this problem if someone does not reside in the UK but in the EU?

I looked up the t&c of Fidelity as it stands if someone were to open a new account today: It says:
I will give notice to the Scheme Administrator if an event occurs, as a result of which I will no longer be entitled to relief on my contributions, under section 188 of Finance Act 2004.
I wonder how they are going to rephrase this in the future to let people know about the effect of no passporting rights 

Anyway, many thanks for your reply, I have always enjoyed reading your very knowledgeable posts over the years and always learn a lot from them!

[Deleted User]

X-O/Jarvis SIPP allows buying and selling ETFs for non-UK residents with the money already within a UK pension system.  It does not allow transfers of new earnings into the SIPP unless you are a UK resident for tax purposes.

dunstonh

Wait, the more I think about this, the less it makes sense to me. You are saying any contribution made by a relevant individual now needs to be both 'advised' and done whilst in the UK. But presumably not whilst being tax resident since you are  talking about just jumping on a plane. None of these changes are enacted in a new UK tax law yet (?), so I presume you are saying the EU wants the contributions to be advised and made whilst in the UK? 

It does not have to be advised.  It can be non-advised. It is the transaction that matters.   The problem is how do you satisfy the in-person side of it.  With an intermediary that is fairly easy as you visit their office.  With a provider catering for the DIY market, how do you do it?    They are set up for online submissions. Not in-person business.  (that covers off your next paragraph too).

It is possible that providers themselves will decide that even if an intermediary is in control of the transaction, they won't offer services to someone within the EU.     

I looked up the t&c of Fidelity as it stands if someone were to open a new account today: It says:
I will give notice to the Scheme Administrator if an event occurs, as a result of which I will no longer be entitled to relief on my contributions, under section 188 of Finance Act 2004.
I wonder how they are going to rephrase this in the future to let people know about the effect of no passporting rights  

They may wait for one of the many side deals that will occur over the next year or two.    

dunstonh

A bit more of an update as a couple of emails have arrived from platforms.   They seem to be in a "pending further information" pattern at the moment.  However, in respect of pensions and insurance, France seems to be an issue.
The French financial regulator (ACPR) has issued a ruling meaning that, where UK insurers have lost their pan-European trading permissions as a result of Brexit, restrictions will come into force from 1 January 2021. Our current understanding is that there will be restrictions for existing business.  No new business will be accepted from French residents.

muze77

Interestingly, I spoke with the  equivalent of the FCA in one European country, and although they could not comment on a UK SIPP, they said that just buying a share in something should be ok if you can select a share, click buy etc. without involvement of the provider, since this would satisfy the reverse solicitation rules! Does that make sense Dunstoh? (I found this statement on this:https://www.esma.europa.eu/press-news/esma-news/esma-reminds-firms-mifid-ii-rules-reverse-solicitation

I wonder if it might explain why Hargreaves and PensionBee have now posted updated statements, saying that buying ETF for example willl still be allowed (but not UK authorised funds). I have updated the first post with new statements.

Note my thinking is that in your French example, it concerns an insurer but the country that I am thinking of has different rules for different types of products, and yes, insurers have their own new EU rules compared to mortgages, credit cards, investment companies and it does not look good for the insurers! Like landlord insurance for UK expats who own UK property, is an absolutely nightmare at the moment with renewals being cancelled. Also, expat mortgages!

Edit: cannot add to the first post. Also, I am not sure if I am allowed to post what H&L say in their FAQ, is that breaching forum guidelines if I quote a few lines?

bostonerimus

The difficulty with cross border pension contributions is tax residency. You are paying into a tax advantaged account in one country, but paying tax in another. There are often double tax treaties in place that cover pensions so one solution is to open a pension/tax advantage account where you are tax resident and just leave the SIPP alone until you make withdrawals when you will then often just have to pay tax where you are tax resident.

muze77

Thanks. The tax situation is clear to me personally. I am concerned about not just selling shares in the SIPP once you have left the UK but still being able to change them for new ones in the SIPPin case the market changes? For example if better ESG alternatives become available, with less greenwashing! If this is not possible, such clients can only keep the same shares/funds until they retire, which might be decades away!

So the main question is not about adding money to the account I mean. Just what you are able to do with what was already there before you left the UK. That said, some providers allow relevant UK individuals to keep contributing for 5 years and that is indeed complicated tax wise in some countries (but not all), but my main concern is switching investments after leaving. I have changed the title somewhat to reflect this.

muze77

I have an update from Fidelity, not good! 

• Once you have moved abroad we will place a hold onto your account, this hold means that no new purchases can be made within the account or any cash added. The only thing you will be able to do on your account is sell assets to cash within the account but you will not be able to use this to buy any new assets.