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

dunstonh

muze77 said:

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.

This is pretty much the norm now for anyone resident within the EU.

bostonerimus

muze77 said:

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.

Ah, I see now. It would certainly be inconvenient if you can't sell and then buy new funds within the SIPP wrapper. I talked to Vanguard in the US about the same issue a few years ago and they were perfectly fine with non-US residents trading within previously opened accounts. They would not allow new accounts to be opened though without proof of US residency.

[Deleted User]

muze77 said:

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.

There is no logical reason to prevent you buying and selling within your SIPP using the funds already there. I would call them.  If they show intransigence, find an alternative provider.  I trade ETFs within a British SIPP even though I am in Canada. 

dunstonh

Deleted_User said:

muze77 said:

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.

There is no logical reason to prevent you buying and selling within your SIPP using the funds already there. I would call them.  If they show intransigence, find an alternative provider.  I trade ETFs within a British SIPP even though I am in Canada. 

Canada does not prevent the UK from offering services to its residents.  The EU does.    

[Deleted User]

Ouch. Crazy. 

dunstonh

Deleted_User said:

Ouch. Crazy. 

Indeed it is.  It is seen as one of the punishments dished out to the UK for leaving the EU.   Although it actually hurts EU consumers just as much as the cost of financial services at an institutional level is more expensive on the continent.

mark55man

which is why the EU institutions insisted on it no doubt to remove cost pressure from their market

nigelbb

bostonerimus said:

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.

Under the terms of Double Tax Treaties (DTTs) it's possible to be a resident of one country while tax resident in another. The DTT that I have personal knowledge of is the UK-France Double Taxation Convention. France regards you as tax resident if you spend more than 6 months a year physically resident in France. In the UK however HMRC has a much lower threshold & a more complicated way of deciding on tax residence with the Statutory Residence Test (the simplest explantation of how this operates is tis flowchart from KPMG https://assets.kpmg/content/dam/kpmg/pdf/2016/01/statutory-residence-test-flowchart.pdf). When both UK & France claim the individual as tax resident then the tie-breakers in Article 4 of the DTT are applied.

"2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:

(a) he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);

(b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

(d) if he is a national of both Contracting States or of neither of them, the competent authorities of the States shall settle the question by mutual agreement.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/496672/france_dtc_-_in_force.pdf

Most (maybe all?) DTTs are based on the same OECD template so will have similar provisions.

muze77

I still think it is not as simple as Fidelity suggests. I have the impression they are afraid of the new EU rules and the MIFID II but there are ways to not involve Reverse solicitation but they do not want to risk any fines? That must be it, otherwise, why would other companies treat the SIPP differently? For example, this is what Hargreaves now says on their site https://www.hl.co.uk/features/brexit-faqs
So HL says you can still buy listed shares, investment trust, bonds and ETFs..
If that is legal for HL, it must be legal for Fidelity, so it sounds like both companies made a different risk vs reward assessment (losing clients because they move their SIPP vs. fines due to falling foul of new rules)?

nigelbb

muze77 said:

I still think it is not as simple as Fidelity suggests. I have the impression they are afraid of the new EU rules and the MIFID II but there are ways to not involve Reverse solicitation but they do not want to risk any fines? That must be it, otherwise, why would other companies treat the SIPP differently? For example, this is what Hargreaves now says on their site https://www.hl.co.uk/features/brexit-faqs
So HL says you can still buy listed shares, investment trust, bonds and ETFs..
If that is legal for HL, it must be legal for Fidelity, so it sounds like both companies made a different risk vs reward assessment (losing clients because they move their SIPP vs. fines due to falling foul of new rules)?

Even if it were illegal under EU rules how would a UK-based SIPP provider be penalised?