International SIPPs – How they impact on you

Be careful when you take advice about UK pensions as an expat while resident abroad and ensure you understand the real reasons behind the recommendation to transfer your pensions – often commission!

Do Not Have An Offshore Bond In A SIPP or QROPS Video Image
SIPP Investment - Moving From Country To Country Video Image

Moving from country to country?

One of the keys to getting good advice is understanding who can provide it, and what protections you have.

SIPP Investment | Benefits Of A SIPP | International SIPPs

Should you even be considering a SIPP? We publish simple information below to allow you to decide.

Whilst QROPS may be the first type of pension you consider as an expat, the truth is that a SIPP may be the better option. For more information on QROPS, visit our QROPS page. Here, we detail the information about SIPP investment, and the potential benefits of a SIPP.

What’s the difference between a SIPP and an International SIPP?

Essentially, a SIPP and an International SIPP are identically regulated. Whilst a few years ago an International SIPP may have differentiated itself by offering currency and other additional SIPP investment benefits linked to expats (hence the name ‘expat SIPP’), the reality is that many SIPPs now offer exactly the same without calling themselves International SIPPs.

Transferring your UK pensions to SIPPs may bring several advantages:

  • Leave remaining pension funds to your chosen beneficiaries free of death taxes if you are under 75
  • Continue to make contributions to your pension, offset by any UK tax you may be earning, or up to £3,600 per annum if you are a UK resident or have been in the last 5 years
  • Enjoy the lowest cost option of all offshore pension solutions (a true low cost SIPP, not those peddled by offshore salesmen, as SIPPs can be obtained for £80-150 per annum)
  • Can take commercial loans within your pension fund
  • Take the option of just tax free cash or just income or combine them under new pension rules from 6 April 2015. More ›
  • Under the age of 75 if you have funds that are unlikely to exceed £1,000,000 then a SIPP should be your first port of call – see below for more information about the age 75 decision and how it could affect you
  • Enjoy greater flexibility and investment freedom than a standard UK pension
  • Be given the option to choose various low cost structures
  • Pension income paid in accordance with relevant double tax treaty with the country that you reside in at retirement – for smaller incomes this could be most tax efficient method when balanced against greater charges of other offshore options. More ›

The new age 75 split from April 2015

In essence, if you are under 75 then a whole new raft of flexibility has been made available to you. Read ›

Death tax benefits have been reduced to ZERO for any funds accessed after 6 April 2015 (even if the person dies in the meantime), and there is greater access in your lifetime up to 100% of your funds wherever you are in the world.

If you are approaching 75 then you need to consider your options more carefully. Over 75 there are reduced options of either an access tax (45% until 2016) or in the future beneficiaries will have to pay income tax on any proceeds they take, although if they leave the fund to accumulate for future beneficiaries then there is 0% tax applied; they can leave the fund until 2016 even if you die in the meantime to take advantage of the new lower tax rules and options.

If you are overseas you will need to consider your DTT with the UK. More ›

Qualifying criteria for a SIPP:

Holds UK pensions (excluding state pensions) worth at least £50kUK Pensions for Expats title=
Fund is unlikely to exceed £1 million by the time of accessing itUK Pensions for Expats title=
Desire to have a low cost structureUK Pensions for Expats title=
Individual may be returning to the UKUK Pensions for Expats title=
Holds a QROPS and want to consider a SIPPUK Pensions for Expats title=
Has already purchased an annuityUK Pensions for Expats title=
Holds a private/personal pension that is already in drawdownUK Pensions for Expats title=
Has a company/occupational pension that is already in drawdownUK Pensions for Expats title=
Still a UK resident with no intention of moving overseasUK Pensions for Expats title=
Living overseas and wants to take advantage of the 2015 rulesUK Pensions for Expats title=

What is a SIPP (or ‘expat SIPP’) and who should have one?

A Self Invested Personal Pension (SIPP) is simply a UK pension vehicle for allowing investors to control their investment strategy, and retirement, themselves. It offers more control to the individual and does not rely on trustees to make decisions for them. The term expat SIPP is often used to describe a UK pension for expats.

SIPPs/International SIPPs are ideal for those with larger UK pension pots who want increased investment flexibility including currencies, or for those who are temporarily, but not permanently non-resident expatriates (expats), or for those who think they are likely to return to the UK to live in the future (or their surviving beneficiaries will return to the UK after their death).

If your fund is likely to exceed £1,000,000 by retirement, then a QROPS should be considered. SIPPs are the main-stay of retirement planning and are also inheritance tax free and good for IHT planning.

Why would a SIPP be better than a QNUPS or QROPS?

With the new rules brought in April 2015 then some benefits, such as income and flexibility to take capital have improved dramatically under a SIPP. Also, the fact is that QROPS or QNUPS are far more expensive than most SIPP products, if not initially then in terms of annual charges. Also, whilst a SIPP should never be utilised with investments held in an investment bond, and therefore be a fraction of the cost of QROPS, thus improving returns over QROPS.

In most cases, people up to the age of 74 are better off with a SIPP for retirement planning, rather than a QROPS, because of the Budget 2014 and new rule changes in 6 April 2015.

AVOID HUGE COMMISSIONS: We will conduct business at minimal cost to you

Contrary to how most overseas expat advisers operate, we work exclusively on a transparent fee-based model, and do NOT charge any commissions. Click for more information on who we are and how we charge › and comparing Fees versus Commissions ›

UK pension transfers by overseas advisers

Beware recommendations of an investment made into an investment bond via a SIPP. This is often very costly bad advice dictated by the limited licences and lack of knowledge of the advisers/advisors! In fact some of the better advice, following UK regulations, is only available through quality specialist pension advisers who understand regulations in the UK, and do not base their advice on who pays the highest commission.

“SIPPs/International SIPPs are ideal for those with larger UK pension pots who want increased investment flexibility”

Download your free guide

DB Defined Benefit Pension Transfers Advice Brochure Image








How we can help you

Would you prefer UK qualified experts to provide competent advice, rather than an offshore salesman seeking commission?

Are you no longer resident in the UK or considering moving abroad?

Do you have more than £50k in your UK pensions?

Would you like to pay less tax and have greater investment freedom?

If you answered YES to these questions, Pensions for Expats could greatly improve your financial and tax situation.
Contact us now ›

Download your free brochures

Expat Pensions Investing Guide Image

Register here for your FREE Guides to Investing with Pensions for Expats.

    * Required