International SIPP without a financial advisor?

aroominyork

Many thanks, dunstonh. Does that mean, going back to the OP's original question, that you cannot self-manage an International SIPP and must engage a specialist IFA to manage your funds?

Bostonerimus1

The status of the SIPP wherever you are resident for taxes is also vital to know. So you must consult local laws and the relevant tax treaty.

aroominyork

https://forums.moneysavingexpert.com/discussion/comment/81882226#Comment_81882226

Yes, I agree, and my understanding of an International SIPP is that, if you are a British expat, you can elect to have No Tax deducted in the UK and be taxed where you live. I am looking at this because OH and I are updating our wills and checking whether we need do anything differently from a straight "50/50 of all assets between the two kids" because one lives in France. I am coming to the conclusion that it makes no difference to how we manage our assets or structure our wills and any decisions as and when necessary (death and taxes…) can be left to him.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81882232#Comment_81882232

Adding an international component to investing and family finances always makes things more complicated. I've avoided being an executor on any UK family wills because it opens up a reporting nightmare with the US IRS as it's classed as being the trustee of a foreign trust.

Living in the USA I've been through a similar thought process as all my heirs live in the UK. They can open beneficiary IRAs (US equivalent of a SIPP) when I die, but they won't be able to trade on the account and will have to withdraw the money within 10 years and will face 30% US withholding tax that they'll have to claim back and obviously UK income tax. Withdrawals from these US IRAs would be taxed as income by HMRC and my heirs' marginal tax is 40%, but if I make the withdrawals now I'll only pay at a marginal rate of 24% income tax. So I'm busily transferring money from tax deferred IRAs, paying the tax and putting the money into a Roth IRA which is sort of the US equivalent of an ISA. The Roth IRA is both US and UK tax free, but there will still be that pesky 30% US withholding tax on foreign payments that my heirs will have to claim back by filing a form with the IRS. But the result is they should get the money with no Federal IHT, obviously no UK IHT, and no income tax in the US or UK.