Non-UK resident + Defined Benefit Plan

[grassjumper]

Just wondering if anyone has been in the same boat as me.

I am a non-UK resident outside of the EEA with money of around £100K in a News International Pension Plan.

The plan's benefits are intended for the purchase of an annuity, and pension draw-down is not supported. The trustees tell me they are not aware of any UK providers offering annuities to non-UK residents which makes it hard to access my money. That leaves the option of transferring the money out. Here my trouble starts:

1) The use of a ROPS (formerly known as QROPS) is one way but finding a local company that can be trusted not to run off with my money would be difficult. Very risky option in my opinion so I'm ruling it out.

2) The alternative is transferring the pension to a UK SIPP but there are two hurdles:
a) The plan contains a guarantee underpin so it's considered DB. The plan's CETV is over £30K therefore getting professional advice is legally required. I tried unbiased.co.uk but no adviser seems interested.
b) There needs to be a UK provider willing to accept the transfer for a non-UK resident. I tried the reputable company Hargreaves Lansdown but they will only consider EEA residents.

Can anyone recommend a good combination of financial adviser and SIPP company for my situation?

[modellingman]

Not the question you asked and possibly not a completely satisfactory approach but many non-residents (but former residents) find it beneficial to maintain a UK address. With a lot of service providers this means the question of residency never gets asked. If you are able to go down this route then whilst your pension payments will likely suffer a deduction of UK tax from the pension provider, you will probably be able to reclaim that tax under the terms of a double-tax treaty.

Whichever route you go down, I cannot imagine that your situation is unique and that there will be a satisfactory UK (or near UK) based solution available.

modellingman

[grassjumper]

Not the question you asked and possibly not a completely satisfactory approach but many non-residents (but former residents) find it beneficial to maintain a UK address. With a lot of service providers this means the question of residency never gets asked. If you are able to go down this route then whilst your pension payments will likely suffer a deduction of UK tax from the pension provider, you will probably be able to reclaim that tax under the terms of a double-tax treaty.

Whichever route you go down, I cannot imagine that your situation is unique and that there will be a satisfactory UK (or near UK) based solution available.

modellingman

Thanks for the suggestion. Unfortunately I don't have such a UK address.

I guess an extreme solution if all else fails would be to return to the UK to live for a short period in order to re-establish UK residency with proper proof of address, and then do all the pension transfers, set up draw down, etc, before leaving the UK again. But if I really have to do all that, it just shows how broken the system is

[clunk]

Two suggestions ..

My Expat SIPP
"If you’re a non-UK resident, it can be difficult to keep track of the pensions that you have in the UK, especially if you have multiple pensions from different employers. Transferring your pension(s) into a SIPP is an easy way to stay in control of your pension."
https://www.myexpatsipp.com/sipp-for-non-uk-residents/

iSIPP
"Imagine if you could consolidate all your pensions into one pot, and manage your pension online, wherever you are in the world."
https://isipp.co.uk/

[clunk]

You may also find this useful ..

"(Update 2024) This article compares some of the best investment platforms for non UK residents."
https://britishexpatmoney.com/2020/10/2 ... residents/

[grassjumper]

Two suggestions ..

My Expat SIPP
"If you’re a non-UK resident, it can be difficult to keep track of the pensions that you have in the UK, especially if you have multiple pensions from different employers. Transferring your pension(s) into a SIPP is an easy way to stay in control of your pension."

iSIPP
"Imagine if you could consolidate all your pensions into one pot, and manage your pension online, wherever you are in the world."

Thanks for your suggestions. Any experience with either provider?

I tried to look for more info on myexpatsipp other than what they say about themselves but nothing substantial came up.

As for iSIPP, I read somewhere that they are really the iPensions Group which used to be called Momentum Pensions. Apparently there was some bad press about Momentum Pensions so I'm not sure I would trust them.

[stevensfo]

Not the question you asked and possibly not a completely satisfactory approach but many non-residents (but former residents) find it beneficial to maintain a UK address. With a lot of service providers this means the question of residency never gets asked. If you are able to go down this route then whilst your pension payments will likely suffer a deduction of UK tax from the pension provider, you will probably be able to reclaim that tax under the terms of a double-tax treaty.

Whichever route you go down, I cannot imagine that your situation is unique and that there will be a satisfactory UK (or near UK) based solution available.

modellingman

Thanks for the suggestion. Unfortunately I don't have such a UK address.

I guess an extreme solution if all else fails would be to return to the UK to live for a short period in order to re-establish UK residency with proper proof of address, and then do all the pension transfers, set up draw down, etc, before leaving the UK again. But if I really have to do all that, it just shows how broken the system is

Do you have a parent's or siblings address that you could use? Preferably with the same surname? Offer to pay part of the council tax? The whole question of residency is not as clear-cut in the UK as in most countries. Just don't confuse with tax-residency, or you may have problems!

Or buy a cheap flat in the north and register with the electoral register, gas, electric etc. As long as the council gets their pound of flesh (council tax) they don't give a monkey's who lives there.


Steve

[grassjumper]

Do you have a parent's or siblings address that you could use? Preferably with the same surname? Offer to pay part of the council tax? The whole question of residency is not as clear-cut in the UK as in most countries. Just don't confuse with tax-residency, or you may have problems!

Or buy a cheap flat in the north and register with the electoral register, gas, electric etc. As long as the council gets their pound of flesh (council tax) they don't give a monkey's who lives there.


Steve

Thanks but is this really legit...? Using my parents' address for correspondence would be acceptable. I am concerned it would be considered a form of fraud if I were to declare myself as a UK resident when I am actually living outside of the UK.

[stevensfo]

Do you have a parent's or siblings address that you could use? Preferably with the same surname? Offer to pay part of the council tax? The whole question of residency is not as clear-cut in the UK as in most countries. Just don't confuse with tax-residency, or you may have problems!

Or buy a cheap flat in the north and register with the electoral register, gas, electric etc. As long as the council gets their pound of flesh (council tax) they don't give a monkey's who lives there.


Steve

Thanks but is this really legit...? Using my parents' address for correspondence would be acceptable. I am concerned it would be considered a form of fraud if I were to declare myself as a UK resident when I am actually living outside of the UK.

I am concerned it would be considered a form of fraud if I were to declare myself as a UK resident when I am actually living outside of the UK.

I've done this for well over 30 years, including working in France, back to UK, then in Italy.

It's only fraud if you are committing fraud, i.e. gaining pecuniary advantage. So don't! You may break some T&Cs of banks but that's all. I have always been squeaky clean when it comes to tax and HMRC know exactly where I am. But my mum's council assumes that I'm still in the village where I grew up, I'm on the electoral register but never vote, cos that would be illegal, have my old library card and am still registered at the same surgery where I grew up, but don't use. I walk past my old Primary school every time I visit and am still in a few village clubs.

In my case however, I do it mainly for nostalgic reasons. Anything financial, you should be very careful. You could do everything by the book in the UK, but what if you want to transfer funds to your 2nd country? They could ask about the source of funds. Is it part of the the international CRS? Even if you keep the funds in the UK, then they could still investigate you and look at your HMRC database.

So it may be best to keep everything in the UK and check if there's a reciprocal tax agreement in place etc. Or.... transfer the whole lot. You don't say which country, but you really don't want to be investigated and fined. Once your name is on a database, it will stay there for ever!

Steve

[grassjumper]

I've done this for well over 30 years, including working in France, back to UK, then in Italy.

It's only fraud if you are committing fraud, i.e. gaining pecuniary advantage. So don't! You may break some T&Cs of banks but that's all. I have always been squeaky clean when it comes to tax and HMRC know exactly where I am. But my mum's council assumes that I'm still in the village where I grew up, I'm on the electoral register but never vote, cos that would be illegal, have my old library card and am still registered at the same surgery where I grew up, but don't use. I walk past my old Primary school every time I visit and am still in a few village clubs.

In my case however, I do it mainly for nostalgic reasons. Anything financial, you should be very careful. You could do everything by the book in the UK, but what if you want to transfer funds to your 2nd country? They could ask about the source of funds. Is it part of the the international CRS? Even if you keep the funds in the UK, then they could still investigate you and look at your HMRC database.

So it may be best to keep everything in the UK and check if there's a reciprocal tax agreement in place etc. Or.... transfer the whole lot. You don't say which country, but you really don't want to be investigated and fined. Once your name is on a database, it will stay there for ever!

Steve

Thank you for your explanation on this. Much appreciated.

I guess I am a bit paranoid when it comes to money. The countries you've mentioned, i.e. France and Italy, are both in the EEA so firms like Hargreaves Lansdown will actually do business with you. I am based in Hong Kong and HL will not let me open an account with them. (Hong Kong does have a DTA with the UK and I am expected to pay taxes on my pension money in the UK, and that's fine with me as I intend to take my 25% tax free lump sum and then do annual draw downs that won't exceed my personal tax allowance, as far as possible)

HL's T&C says:

We offer a full range of services to UK residents and may be
able to offer limited services where you are resident outside
the UK. You must let us know if you are not, or cease to be,
resident in the UK or the EEA and/or become resident in the
USA. For these purposes you are deemed to be resident in a
country if you have lived, or move with the intention of living, in
that country for 12 months or more. We may not be able to
offer some or all of our services to you if you cease to be
resident in the UK.
Those dealing with us from outside the UK may not be
afforded UK legislative protections and should check their
own state’s legislation and tax laws before undertaking a
transaction with us.


No idea if HL has the capability of finding out I am not actually living in the UK. I am imagining that breaking their T&C would give HL grounds for closing my account and returning the pension money to me in one go, with all the tax implications, taxes which HMRC would be only too happy to deduct.

I wonder if there's a legal onus on HL to do additional checks on non-UK residents outside of the EEA and that's why they won't take me on, and maybe it's the same reason why financial advisers may be reluctant to take up my case on unbiased.co.uk?

EDIT: on re-reading the T&C, I think I would need to check with HL whether leaving the UK after opening an account would have ramifications.

[mc2fool]

I wonder if there's a legal onus on HL to do additional checks on non-UK residents outside of the EEA and that's why they won't take me on, and maybe it's the same reason why financial advisers may be reluctant to take up my case on unbiased.co.uk?

I don't know about additional checks but most financial institutions won't deal with you simply 'cos the normal Know Your Customer and Anti Money Laundering checks required aren't as simple and would require extra work (and skills & knowledge).

Those checks most commonly are done by the credit reference agencies (Equifax, Experian and TransUnion) who have electronic access to your electoral roll registration, bank accounts, credit cards, utility accounts (water, phone, etc), etc, all in the UK of course, and on being passed your name and address electronically can instantly verify you, or not.

If that fails to do so then most institutions have staff that know what a UK driving licence, council tax bill, bank statement, etc look like but have little to no idea about foreign ones, and the more foreign they are the less likely they'll be able to consider them.

[yopyop]

I was in the same boat and managed to get the DB into youinvest by first transferring to a James Hay SIPP. My advisor recommended this one. After transferring to James Hay it was a simple step to move from one SIPP to another regardless of living in a nonEEA country.

[yopyop]

Sorry for the split post.
The hardest step was finding a trusted advisor who I had to put my argument to. Most weren't interested in even considering the transfer even without listening to any argument. But I did manage to get three, of which one I was happy to proceed.

This was all back in 2016/17
Yopyop

[JohnW]

https://www.evidenceinvestor.com/find-an-adviser/
Tell 'em your particular needs, and they'll try to find one for you.

[grassjumper]

I was in the same boat and managed to get the DB into youinvest by first transferring to a James Hay SIPP. My advisor recommended this one. After transferring to James Hay it was a simple step to move from one SIPP to another regardless of living in a nonEEA country.

Did you find your adviser while you were living outside the UK? How did you find them and how much did it cost you? And would you recommend the adviser you had? Thanks.

[yopyop]

Wish I could be more helpful - My initial contact was 2015 - I just ran a google search on the name and it no longer seems to exist.

But my process was simply trial and error with google.
I found firms/advisers through lots of research as well as searches on Google. Then it was hit and miss until I got down to a shortlist of people i had some kind of confidence in. (online chats, email, etc.

Yes I was outside of the UK.

At the time with near zero interest rates , I felt I had a good case for converting from a FTSE 100 company "gold plated" Direct Benefit pensions to a DC. The Transfer Value was considerably high at the time. However, I still had to put a convincing plan to the adviser based on my country, lifestyle, financial circumstances, future requirements, etc - it wasn't simply, request and transfer.
The negotiated fee was about 1.5% of the transfer value.