SIPP into overseas pension scheme

Suhusa

sultan123 said:

So no overseas pension pot gets you tax relief? E.g. reduced net income, 20% back etc??

Why would other countries have the exact same tax schemes as the UK?

bostonerimus

sultan123 said:

bostonerimus said:

Forget about ROPs and QROPS. You can invest however you like inside UK based pension wrappers and tailor your risk and you get all the protections of UK regulation and tax advantages. Going overseas will be expensive and you'll have the added risk of foreign regulation and dealing with cross boarder taxation. You'll also be swimming in shark infested waters. If you are considering this you need to read and understand the applicable Double Taxation Treaty and that should put you off doing it.

So no overseas pension pot gets you tax relief? E.g. reduced net income, 20% back etc??

Are you talking about trying to pay UK earned income into an overseas pension while a UK tax resident? If you are making withdrawals you'll probably have to pay tax in the UK if you are UK resident as that's how Double Tax Treaties are usually written. There is no silver bullet here and plenty of great tax benefits by just using the UK domestic system...and you can set your UK pension up to be as risky or safe as you want.

sultan123

bostonerimus said:

sultan123 said:

bostonerimus said:

Forget about ROPs and QROPS. You can invest however you like inside UK based pension wrappers and tailor your risk and you get all the protections of UK regulation and tax advantages. Going overseas will be expensive and you'll have the added risk of foreign regulation and dealing with cross boarder taxation. You'll also be swimming in shark infested waters. If you are considering this you need to read and understand the applicable Double Taxation Treaty and that should put you off doing it.

So no overseas pension pot gets you tax relief? E.g. reduced net income, 20% back etc??

Are you talking about trying to pay UK earned income into an overseas pension while a UK tax resident? If you are making withdrawals you'll probably have to pay tax in the UK if you are UK resident as that's how Double Tax Treaties are usually written. There is no silver bullet here and plenty of great tax benefits by just using the UK domestic system...and you can set your UK pension up to be as risky or safe as you want.

Yeah this is it. In UK SIPP, you can claim 40% but guessing you cannot overseas

dunstonh

sultan123 said:

dunstonh said:

Because the UK SIPP investments seem more risky in terms of growth.

SIPPs are whole of market for investment choice.  That is over 30,000 different investments available.   So, there isn't much logic in your argument there.

Yeah but they are always risky?

There is no risk free option.   You can hold the lowest investment risk option  - cash - but then you put it at shortfall risk and inflation risk.  Risk is not on or off.  it is a sliding scale.    

Moving your investments to an overseas wrapper will actually increase the risk as you introduce currency fluctuations.  If you choose to hedge the currencies then that will cost you more and you are just replicating what you can do in the UK much cheaper.

sultan123

dunstonh said:

sultan123 said:

dunstonh said:

Because the UK SIPP investments seem more risky in terms of growth.

SIPPs are whole of market for investment choice.  That is over 30,000 different investments available.   So, there isn't much logic in your argument there.

Yeah but they are always risky?

There is no risk free option.   You can hold the lowest investment risk option  - cash - but then you put it at shortfall risk and inflation risk.  Risk is not on or off.  it is a sliding scale.    

Moving your investments to an overseas wrapper will actually increase the risk as you introduce currency fluctuations.  If you choose to hedge the currencies then that will cost you more and you are just replicating what you can do in the UK much cheaper.

With no tax saving?

HappyHarry

Pure curiosity - what overseas investments are you considering that you can't hold in a UK based SIPP?

bostonerimus

sultan123 said:

dunstonh said:

sultan123 said:

dunstonh said:

Because the UK SIPP investments seem more risky in terms of growth.

SIPPs are whole of market for investment choice.  That is over 30,000 different investments available.   So, there isn't much logic in your argument there.

Yeah but they are always risky?

There is no risk free option.   You can hold the lowest investment risk option  - cash - but then you put it at shortfall risk and inflation risk.  Risk is not on or off.  it is a sliding scale.    

Moving your investments to an overseas wrapper will actually increase the risk as you introduce currency fluctuations.  If you choose to hedge the currencies then that will cost you more and you are just replicating what you can do in the UK much cheaper.

With no tax saving?

You'll have to watch out for the potential of a 25% tax on the transfer. You won't be able to make regular contributions and there will only be trouble and expense and no tax savings if you remain a UK resident. But go ahead, you'll lose a lot of money. Overseas pensions are only appropriate for non-UK residents, and if a DT Treaty is in place then not even then IMO.

[Deleted User]

There are 4 major risk categories and one of them is a government collapse which wipes out all investments and savings held within that particular  jurisdiction.  Extremely rare but this did happen (not in the UK). 

The only way to mitigate this type of risk is by holding accounts and assets in more than one country, and to hold  them directly (not via a Uk based fund). 

The probability of such a disaster for a country like UK is sufficiently low to be ignored by most people but if you are concerned then there are ways of doing it.  Other than this risk, there is no need and lots of downsides for a UK taxpayer to try and relocate pension savings abroad. 

sultan123

Deleted_User said:

There are 4 major risk categories and one of them is a government collapse which wipes out all investments and savings held within that particular  jurisdiction.  Extremely rare but this did happen (not in the UK). 

The only way to mitigate this type of risk is by holding accounts and assets in more than one country, and to hold  them directly (not via a Uk based fund). 

The probability of such a disaster for a country like UK is sufficiently low to be ignored by most people but if you are concerned then there are ways of doing it.  Other than this risk, there is no need and lots of downsides for a UK taxpayer to try and relocate pension savings abroad. 

When you say relocate are you referring to transferring pension or putting in new investments.

I am guessing no tax rebate is given for overseas funds

sultan123

Suhusa said:

sultan123 said:

So no overseas pension pot gets you tax relief? E.g. reduced net income, 20% back etc??

Why would other countries have the exact same tax schemes as the UK?

More do they have a tax relief system at all. Seems like the answer is no?