Submitted by
Sestini & Co | on Fri, 05/31/2019 - 15:00 | In
non-dom,
Pensions,
private client Last month we wrote about how you can consolidate multiple pension pots and focused on transferring to an SSAS. So, what are your choices when it comes to self-administered pension schemes? This blog takes a look at three of your choices: QROPS, SSAS and SIPPs.
What is a QROPS?
A QROPS, which stands for “qualifying recognised overseas
pension scheme”, is an overseas pension scheme that HMRC allows to receive
transfers from registered pension schemes in the UK.
To qualify as a QROPS, the scheme must meet UK tax law
requirements in that it’s available to residents in that country and can’t be
accessed before the age of 55, other than under special circumstances.
If you want to check if a pension is a QROPS, you can check
an HMRC-approved
list of schemes.
A QROPS might be a suitable choice if you are moving abroad,
to ensure you are getting your income in the right currency, as exchange rates
fluctuate, or you may be working outside the UK for an employer that offers a
QROPS with good benefits.
From March 17th 2017, there is a 25% tax charge
if you transfer to a QROPS with some exceptions and there is a 10-year
reporting requirement to HMRC upon transfer.
There is also a £1 million lifetime allowance that you can
have in pension savings in the UK unless you have one of the forms of
protection in place.
What is a SSAS and
how does it differ from a SIPP?
As we said in last
month’s blog,
a SSAS (Small Self-Administered Scheme) is a type
of defined
contribution pension that an employer can self-manage for less than 12 members and
is set up by the directors of a business to gain more control over how their
pensions are invested. It is established under Trust by a private limited company
and registered with HMRC.
It differs
from a SIPP in that it is set up by a company director as the employer rather
than an individual and is designed for owner-managed businesses, SMEs, and
family businesses.
A SIPP can be used by
anyone, as it is not connected to a limited company, making it an ideal vehicle
for family businesses and SMEs as it can be used to fund business growth. A SIPP
gives you greater control over investment decisions and offers
a wider range of permitted investment classes, such as gold, high interest savings,
commercial property, listed and unlisted securities. It allows investment in
assets that might be considered too high risk by a SIPP.
Request a copy of our SSAS vs SIPP document by completing this short form.
How we can
help
Whatever you choose, it’s a good idea to get input from financial professionals. Sestini & Co Pension Trustees Ltd provide bespoke pension administration services to support business owners who want to take control of their retirement savings and align them with the needs of the business.
Whilst a professional
Trustee cannot provide financial advice, we will work
alongside a wealth manager to provide a seamless service tailored to your
needs.
With our combined
pension and taxation expertise we are ideally placed to support the bespoke
pension needs of business owners by bringing our experience and foresight to
bear to provide a flexible
SSAS pension for your business.
If you would like to
discuss your options in relation to a SSAS, call us on 01761 241 861 or email
us today. We will be pleased to advise you or to invite you into
our offices
in Paulton, near Bristol and Bath, for a consultation. Find out more about our pensions services here.
