Pension and retirement planning is an important part of the financial advice process that our retirement planners offer.
It is not our clients’ lives that are complicated, rather the changing legislation that makes financial planning so difficult. A client was referred to us by her accountant as she wished to draw her pension benefits from her SIPP. Our client lived overseas and had read that she may be able to transfer her SIPP to an overseas pension in order to save tax.
We worked closely with her accountant to determine how her pension would be taxed if she took benefits in the UK. From our research and discussions with our client’s other professional advisers, we concluded a transfer overseas was not necessary and that any action should be delayed until age 55. At age 55, we implemented the drawing of pension benefits in full.
By fully understanding the implications of all of the client’s options, we were able to save a significant amount of tax having fully accounted for her personal situation, which ensured the optimal timing of actions. The value of the pension was moved into her personal account and, due to the local tax rules of her overseas residence, she would also avoid inheritance tax on her death.
The solutions to this client’s needs had the additional benefit that the tax savings made were used to make gifts to her beneficiaries, something she had not thought possible.