SIPPs versus QROPS

PENSIONPLANNING

Weigh up all of your options

PENSIONPLANNING

As pension legislation has changed over the years, pension plans have adapted to suit.But could your money be held in an old-style plan, that no longer suits your needs?

If you don’t live in the UK, pension planning is a very specialist area for advice.Each different pension structure holds varying benefits and drawbacks. Some arecheap and cheerful, some not so cheap and certainly not cheerful. Some really oldplans have benefits such as guaranteed annuity rates (GARs), protected tax free cashand life cover elements, but these tend to come at a cost – or a catch. For example,you may have a RAC (Retirement Annuity Contracts) from being self-employed atsome point for many with generally high retirement income ‘promises’ – GARs, carrylittle or no death benefits for your spouse and also specify a rigid retirement age – soare they really best for you and your family?

As people live longer they have a longer future to provide for. With the state pensionseemingly getting further and further away, and with speculation around the potentialof it being means-tested in the future, its vital for you to prepare your financial future.For more information about our pensions review process, see our booklet ‘YourRetirement Review’

Pensions come in all different shapes and sizes.

You may live abroad now, but will you retire abroad?For those currently working abroad there may be two keypension structures to consider,

Their suitability will be driven entirely by the needs andobjectives of you… And your family

Pensions are an intrinsic part ofyour wealth management andoverall financial planning strategy

• A Self Invested Personal Pension (SIPP)• A Qualifying Regulated Overseas Pension

Scheme (QROPS)

WHAT ISA SIPP?A Self-invested personal pension iseffectively a straightforward UK-basedprivate pension plan with addedfunctionality and flexibility.

A SIPP is simply a pension‘wrapper’, the SIPP

administrator ensures thepension structure is in place,and that your plan adheres to

all of the UK’s rules andregulations surroundingpensions and retirement

planning.

However within your ‘wrapper’ you can invest in a wide range ofopportunities, and design your pension planning to best suit you, bothleading up to and through your retirement.

Key points:Is a UK based plan, subject to all the benefits and drawbacks of UKlegislationIs fully UK friendly, and will continue to function for you whether youare UK resident or living overseasCan invest in a wide range of opportunities including commercialproperty and land, direct company shares and has access to thousandsof investment fundsCan convert to a QROPS at any time, should your circumstanceschangeUpon taking income, it will be taxed in the UK. However, double-taxation agreements may be in place which can benefit you dependingon your country of residence at retirementCan be better for those- Retiring in the UK or a jurisdiction with a double-taxation agreement - With total pension funds under £1m – and never likely to reach the lifetime allowance (currently £1.25m 2014/15)- Unconcerned about UK pension legislation

While it is recognised and authorised to accept transfersof pension funds in from UK plans, it must only reportto HMRC for its first 10 years and is not subject tocontinuing UK pensions regulation.

As an international plan, it can benefit from local taxationand adapt to your changing circumstances – particularlyof use for those retiring offshore where residency andtaxation are a key component of long term incomeplanning.

A Qualifying RecognisedOverseas Pension is aninternational pension plan,recognised by HMRC.

Key points:Not subject to the ever-changing UK pension legislationImproved tax efficiency for those resident outside ofthe UK for at least five yearsDoes not carry a pension lifetime allowanceNo tax on pension funds upon death, at any timeCan be better for those- Retiring offshore, particularly in a jurisdiction with nodouble-taxation agreement with the UK- With pension funds in excess of £1m, and/or likely togrow beyond £1.25m (current UK lifetime allowancefor 2014/15)- Wanting improved tax efficiency on death

Your circumstances – are you married? Do you havechildren? If not, do you plan to?Your tax position & the tax status of the country youboth reside in and plan to retire inYour priorities – there are so many different benefitsand drawbacks to pension planning, we need to ensureyour priorities are met, even if at the expense of otherpotential benefitsYour investment risk profileYour term to retirement and retirement plans. Whendo you plan to retire? Do you want to go part time? Willyou return to work? Do you need flexibility? Do youneed a lump sum to pay off a mortgage or even buythat yacht?Your overall financial planning and wealth. Pensionplanning isn’t the be-all and end-all, but plays an importantpart of your financial portfolio

Which is better for you?At Guardian, we know how dangerous generic adviceis. Your future is at stake and we will talk you throughyour options and help you understand your needs,objectives and priorities. Our advice will depend onyour answers to the following questions, and more…What existing plans have you got in place? You may notneed to change anythingYour current country of residence – and where youmay move to before and through retirementThe total value of your pension plans

LET’S COMPARE

*30% available should QROPS be in place for over 10 years, andsubsequently out of HMRC reporting requirements

Global Enquiries +44 800 779 7028

Switzerland +41 22 710 7876

Dubai +971 4450 9700

Hong Kong +852 3796 3555

Qatar +974 4491 5355

United Kingdom +44 2921 677 940

Information correct as of 8th May 2014. The information provided is for guidance only and advice should be sought before making any financial decisions.

Guardian Wealth Management Ltd cannot be held responsible for any errors or omissions which result in financial loss.

Don’t let your children miss outon the most precious of

opportunities

Contact our financial advisorstoday so they can help you startbuilding towards your children’s

brighter future

S I P P Q R O P S