HELPLINE: 
Daniel Butcher, founder of DTB Wealth Management, reviews ways to minimise tax and risk if moving your UK pension across to France.
Moving your UK pension to France and into a Luxembourg or Ireland-based assurance vie (AV) offers tax efficiency, investment flexibility and estate planning advantages but is not without risk. Overlooking key details can jeopardise long-term results or restrict access to your money.
“The structure itself – UK pensions (defined contribution, SIPP) to ISIPP to AV – is not the risk, but there are five main areas that need to be managed in order to make a successful transfer that is as stable and efficient as possible,” says Daniel.
“The first is to ensure that your capital is held by an A+ or better rated custodian bank (as rated by Moody’s, S&P or Fitch), such as BNP Paribas, BNY Mellon or Crédit Agricole Luxembourg, which are regulated in investor-protective jurisdictions.
“Next, to beat downturns from market volatility, it is important to create a diversified, risk-profiled portfolio, we suggest holding no more than 3% in any one fund.
“Poor selection or overexposure to a single asset class can lead to underperformance or losses,” Daniel continues. “We ensure that our clients receive tailored investment guidance and help them minimise risk by avoiding fund concentration.”
Obtaining the correct NT (Non-Tax) code from HMRC can take 6-8 months and delays may trigger unexpected tax. It is necessary because it ensures holders only pay tax only in France – without it the UK withholds 45% which would then have to be claimed back.
An adviser who has interim ISIPP strategies or tax reclaim procedures can assist here.
“If the NT code is delayed, we help our clients retain full flexibility by, for example, leaving their funds in the ISIPP, where they are Brexit proof and fully accessible,” says Daniel. “This means you can withdraw money and have it sent wherever you reside.”
“Hidden or excessive fees are another obstacle, all investment products include fees and commissions that can erode your investment. We ensure clients select clean share classes, when available, and make them aware of all fees, particularly hidden commissions.”
Daniel concludes: “At DTB Wealth Management, the fees are fixed, transparent and disclosed. The total setup for a UK pension to SIPP, ISIPP and AV, is around £3,500 per transfer, plus £400 per extra pension involved, capped at £1,000, plus £400 to obtain the NT code.”