How IPM can help your overseas pension clients

As the world gets smaller and our client base matures, we’re increasingly looking after clients who no longer live in the UK.

These days, a client’s career can easily take them to several different countries. So, it is not unusual for IPM to have SIPP clients who live (or have lived in) a wide range of countries and have accumulated, or are accumulating, UK pension benefits.

Looking after clients who live overseas can present a financial planner or adviser with a range of challenges. However, their SIPP need not be one of them. Keep reading to find out how IPM can help you to continue to meet your client’s needs – even if they are overseas.

Ways we can help your overseas clients

Over the years, many of our clients have moved overseas to work. Or, in some cases, they have retired abroad. You’re probably in the same situation! We have clients who live all over the world: in Europe, the US, Canada, Australia, Brazil, Thailand, Singapore and Hong Kong to name just a few locations.

In each case, our client has either set up their SIPP and then moved abroad, or they were already living abroad when they established their SIPP. The key factor is this: the client had existing UK pension benefits which they were able to bring across into the SIPP.

For example, an American client may have worked for various companies while in the UK and now wants to consolidate their various pensions into one SIPP, with pension benefits being paid in USD.

Many providers struggle with this type of client. Some won’t establish SIPPs for clients with non-UK addresses and many will not run SIPPs in anything other than GBP.

We can run the SIPP in any currency the client wishes, subject to the chosen investment house supporting the client’s requirements. And, if the chosen investment house is unable to convert the GBP to a currency of the client’s choice, IPM has relationships with currency conversion firms who can assist with this.

This means that a client’s SIPP can be run in their local currency, removing any future exchange rate risk. Aside from GBP, the most common currencies in which we currently run SIPPs are EUR, USD and AUD.

As well as running the SIPP investments in their chosen currency, IPM can also pay pension commencement lump sum (PCLS) and income in non-GBP currency, subject to certain criteria. For ongoing regular income, our preference would be that the client obtains an NT tax code.

Regardless of which currency the SIPP investments are held in, all reporting by IPM to HMRC will continue to be made in GBP.

At this point, it’s important to note that IPM are not tax experts. We strongly advise that independent tax advice is taken as to how the UK pension benefits and any withdrawals from the SIPP will be treated in other countries.

Example: Running SIPPs for US residents who have previously worked in the UK

We are the preferred SIPP provider for an international wealth manager and investment house.

Before the drop in the Annual Allowance to £50,000 in 2011/12, staff came from a number of countries, including the US, and worked in their UK offices for a few years.

Part of their remuneration package included generous pension contributions, which were paid to their IPM SIPPs over several pension input periods.

Many of these clients have since returned to the US and, in some cases, started to retire. Their UK SIPP is now forming part of the income they are using to fund their retirement.

The investment portfolios within these SIPPs are being run in USD. And, in conjunction with their US tax adviser, the clients have the ability to take both their PCLS and income from their SIPP, paid in USD.

Find out more about how we can help your clients with American connections here.

Do you have clients with an overseas connection who you feel would benefit from our approach? If so, please get in touch. Email or call 01438 747 151.

Get in touch

Whether it’s a question about a specific client or SIPPs in general, we are here to help. Call us on 01438 747 151, email or complete the form below: