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Pensions

The vast array of UK and European pensions is complex and yours will need specific research and investigation. There are thousands of structures across the EU and the vast majority can be transferred into international retirement structures, for the purposes of enhancing pension benefits, reducing taxation (depending on jurisdiction) Family Estate Planning and Asset Protection.

Most EU pensions can be transferred to schemes in other EU states that hold a more beneficial tax position for the member. This takes careful planning and an in-depth understanding of the Double Taxation Agreements (DTA) between member states.

Claremont works with several international tax advisory agencies, to ensure that pension funds are only moved to jurisdictions that hold tangible benefits for the member and the highest levels of investor protection.

The current state of Defined Benefit (Final Salary) pension schemes has put many pension funds in serious risk of collapse. The 2018 collapse of Carillion has seen thousands of scheme members thrown into uncertainty. There are hundreds of company schemes across the UK and Europe that have deficits, in their pension funds, of values greater than the company’s market value, this is a real concern.

To have Claremont run an analysis on your scheme, or for more information on UK and European pensions, please contact us on pensions@claremontwealth.com

What is a SIPP?

A Self Invested Personal Pension or SIPP, is a type of personal pension scheme. The SIPP itself is a pension ‘wrapper’ that holds investments until retirement and the investor starts to draw a pension income. Most SIPPs allow investment in a range of assets not just in an insurance backed fund provided by an insurer. SIPPs are designed for people who want to take more control over their funds and protect them from company deficits. These pension funds are generally managed by a Discretionary Fund Manager (DFM) or they can be managed by the policy owner themselves. (www.hmrc.gov.uk).

Claremont work with numerous international DFM’s and can guide you through the world of investment options available for your SIPP.

What is a QNUPS?

A Qualifying Non UK Pension Scheme (QNUPS) is pension trust structure, the assets held are in the legal ownership of the trust and not the member but held for the member’s benefit. A QNUPS does not hold UK tax relieved funds (i.e. contributions are paid after tax), and therefore, there are no limits on the pension fund size, thus making it an ideal supplementary pension. The Trustee will distribute any residual value, normally directly to nominated beneficiaries of the late member, at the Trustee’s discretion and in accordance with the plan rules.

Upon the member’s death, any residual value will normally fall outside of a member’s estate and will be held by the Trustee, in turn this will be distributed to the nominated beneficiaries correlating with the late members letter of wishes. The opportunities and benefits may vary depending on where the member and their subsequent beneficiaries are tax resident.

What is a QROPS?

A Qualifying Recognised Overseas Pension Scheme (QROPS) is a pension scheme established in a regulated jurisdiction outside the of UK that is broadly similar to a UK registered pension scheme. When an individual transfers their UK pension savings to another registered pension scheme or to a QROPS the transfer can be made free of UK tax (where it does not exceed the lifetime allowance). (www.hmrc.gov.uk)

What is a EURBS?

A European Union Retirement Benefit Scheme (EURBS) is suitable for a range of EU countries frozen pension schemes. Similar in benefit format to a QROPS, the EURBS is specifically for pension schemes domiciled in the EEA (European Economic Area). Each case must be investigated individually and may have differing outcomes when considering a potential solution.

  • Is a standard Pensions fund taxable?
    Yes, it is. Generally speaking all pension funds are taxable when income is taken, depending on your residential status. Most pension schemes allow for contributions free of tax, with the aim of accumulating a larger fund. This has a benefit for you and a benefit for the tax authority, you receive a greater opportunity to grow your fund and the tax authority receives the opportunity to tax a larger fund on the way out in retirement. To find out more about the most efficient way to save please contact us.
  • How much of my pensions is my spouse and children entitled to?
    This totally depends on the type of pension structure that you hold. The amount of your pension that you can pass on ranges from 100% to 0%. It is crucial to understand the benefits and drawbacks of certain types of pension plans and all options you may have regarding the structure. You must take into account a range of factors that will determine the best possible pension structure to hold your retirement assets.
  • What is the difference between a private/company and a state pension?
    A state pension is generally provided through inland revenue or national insurance contributions and is a founding element of the countries welfare state. To get the benefit currently you must have paid or been credited with National Insurance contributions (NI) which are usually taken out through your earnings. The amount you receive depends on whether there are any gaps in your NI contributions.  If you have gaps in your contributions when you retire the level of your state pension may be below the national standard level.
  • I have a pension fund in my home country, and want to get an update, what do I do?
    What we need to do, to evaluate your current scheme, is to contact the current administrator and obtain a current estimated transfer value (CETV) and a full scheme breakdown. This is done by signing a letter of authority (LOA) that allows us to communicate with the pension company on your behalf. Usually we will have your pension company send you the relevant documents directly to comply with data protection rules. We will then sit down and take you through full analysis of your current scheme. To begin the process please provide your name and contact details and one of the pensions team will be in touch.