Getting The Most Out of Your SIPP

Of all the pension investment options in the United Kingdom, the Self-Invested Personal Pension scheme (SIPP) is a viable option for both locals and expatriates. Financial advisors have already said a lot about the benefits or disadvantages of this system over others like the QROPs (Qualified Recognised Overseas Pension Scheme). However, there is more to realising the full benefit and proper management of such schemes other than just a comparison to its equivalents. Most expatriates preference depends on what kind of income they have, and the type of financial advice they have received.

If you are not aware of the difference between these two primary international pension plans for expats, it is important to ensure that you understand them before you make a decision. Our financial advisors at Harrison Brook will be happy to take you through your options. The following article, however, focuses on how best you can manage and benefit from your SIPP, depending on further issues such as investments and taxation. It also highlights the core benefits of the plan and how it works for expats.

SIPPs

Based in and regulated by UK law, the Self-Invested Personal Pension scheme is extremely malleable, and has benefits for both locals and expats. It facilitates the transfer and amalgamation of UK pension plans into one structure. It involves a broad range of investment options and sort of ‘wraps’ them all together until your retirement thus, giving you a pension income. You have the freedom to incorporate individual or overseas stocks, insurance bonds, investment trusts, bank or building society deposit accounts, commercial properties, and collective investments. SIPPs ensure you cultivate retirement benefits while enjoying tax advantages and build your investments devoid of income taxes and capital gains. You also get flexible benefits which allow you to withdraw as little or as much as you desire, whenever you wish, even by the age of 55 before you leave your job.

Why get a SIPP

For expats who want to retire at home, the SIPP scheme is most likely the best option. Firstly, it is available to any expatriate living anywhere in the world. If you are an expat who pays taxes in the UK, the plan allows you to pick up the pension contribution relief on your retirement reserve. It, however, does not allow tax relief on contributions for non-UK taxpayer expatriates. If you do not wish to retire in the UK, you can still have a SIPP but carry out a pension transfer to QROPS much later upon your retirement. Because the scheme can be customised to every individual in this way, managing a SIPP is easier than most other pension plans. It is worth noting, however, that your main home determines how your taxes impact your investments and contributions.

 

At Harrison Brook, we direct expats on tax treatment according to their place of residence. For more information, contact us today.

The information contained herein is for informational purposes only which is subject to change and should not be relied upon. You should seek advice from a professional adviser before embarking on any financial planning activity.