SIPP choice, drawdown and transfers abroad
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[Deleted User]
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I currently have an Equitable Life and workplace pensions in the UK with approximately 100k between them. As EL is being sold, I am thinking of transferring both funds to a SIPP to reduce costs and for added flexibility. Very familiar with investing but not with specific investment vehicles in the UK, or the best methods for moving money to CAnada when the time comes. Would appreciate your comments on the following plan:
1. Open AJ Bell SIPP on Jan 1st 2020.
2. Transfer cash value of both current pensions into SIPP, once (and assuming) EL sale goes through. There should be no costs.
3. Buy ETFs to reflect my overall investment policy statement and asset allocation. Let’s say HSBC EURO STOXX 50 UCITS ETF EUR, but it will likely be 2 ETFs.
4. When drawdown time comes, set up HSBC Premier account in the UK. I have one in Canada but not in England. Supposedly they make it easy for you to set up an account abroad but I’ve never done it.
5. Use UK bank account to channel drawdown withdrawals as well as UK DB pensions. The latter will start paying out in 2021, so need to figure out an efficient way to transfer funds to Canada and convert into CAD.
6. Transfer between UK and Canadian HSBC accounts for free. Use a ForEx company to exchange for 0.5% or so.
1. Open AJ Bell SIPP on Jan 1st 2020.
2. Transfer cash value of both current pensions into SIPP, once (and assuming) EL sale goes through. There should be no costs.
3. Buy ETFs to reflect my overall investment policy statement and asset allocation. Let’s say HSBC EURO STOXX 50 UCITS ETF EUR, but it will likely be 2 ETFs.
4. When drawdown time comes, set up HSBC Premier account in the UK. I have one in Canada but not in England. Supposedly they make it easy for you to set up an account abroad but I’ve never done it.
5. Use UK bank account to channel drawdown withdrawals as well as UK DB pensions. The latter will start paying out in 2021, so need to figure out an efficient way to transfer funds to Canada and convert into CAD.
6. Transfer between UK and Canadian HSBC accounts for free. Use a ForEx company to exchange for 0.5% or so.
0
Comments
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Make sure you understand the UK/Canada tax treaty and the how it treats cross border pensions.
Are you able to open as SIPP if you are not a UK resident?“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
I was told I can by a couple of SIPP providers.
I am subject to Canadian taxation only. No 25% tax free, but also no double taxation.0 -
From the AJBell website (FAQ section).Are you able to open as SIPP if you are not a UK resident?
Am I eligible for a SIPP?
You can have a SIPP if you're resident in the UK. You can also set up a SIPP if you're resident overseas but want to transfer a UK pension to the SIPP (though keep in mind you may not be able to make further contributions to it).
@Mordko
Are you considering trasferring to a SIPP because you think you might be able to somehow benefit from some kind of tax relief, despite being a non-UK resident, or is it just to reduce costs and for added flexibility?0 -
I don't understand how AJ BELL can set up a SIPP for a non UK resident. Didn't realise they were authorised as a UK registered pension scheme to conduct business all around the globe?
What happens if someone living in the cayman islands wants to take drawdown from the plan? What happens if someone from China wants to make a contribution?0 -
I don't understand how AJ BELL can set up a SIPP for a non UK resident. Didn't realise they were authorised as a UK registered pension scheme to conduct business all around the globe?
Why wouldnt they be?
The restrictions that firms put in place are usually high-risk areas, like Iran, Iraq and the USA. And the EU due to its restrictive passporting permissions.
AJ Bell are saying they will accept overseas residents where there is already a UK pension and they are transferring it. That is UK to UK in terms of the pension.0 -
@Mordko
Are you considering trasferring to a SIPP because you think you might be able to somehow benefit from some kind of tax relief, despite being a non-UK resident, or is it just to reduce costs and for added flexibility?
No changes in terms of taxation, except perhaps removing the stamp duty on uk traded portion. The old workplace pension is not great but ok in terms of costs; less than 0.5%. EL fund charges are high at 1% MER for most options. This won’t change after the transfer, at least not in the short term. That’s an order of mag higher than what I am used to. And the new options they are offering are very limited. They don’t really fit with how I slice my overall portfolio.
AJ Bell gives lots of ETF options for under 0.1% per year. There are also platform charges @100 quid a year (roughly 0.1%) and future drawdown charges but the overall costs are more competitive unless I am missing something.
Another minor point is that ETFs will be easier to track automatically within my google sheets system.0 -
midlandsimon wrote: »What happens if someone living in the cayman islands wants to take drawdown from the plan? What happens if someone from China wants to make a contribution?
The Cayman Islands individual will be taxed as per double taxation agreement.
The Chinese person won’t be able to make new contributions0
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