HELPLINE: 
If you are moving your UK pension across to France, these are the smartest ways to minimise tax and risk during the process, says Daniel Butcher, founder of DTB Wealth Management.
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 it’s not without risk. Overlooking key details can jeopardise long-term results or restrict access to your money.
“The structure itself – UK pensions (DC, 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 lucrative as possible,” said Daniel.
The first is to ensure that your capital is held by an A+ rated custodian bank (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’s important to create a diversified, risk-profiled portfolio, holding no more than 3% in any one fund. “Poor selection or overexposure to a single asset class can lead to underperformance or losses,” said Daniel. “We ensure that our clients receive tailored investment guidance and help them minimise risk by avoiding fund concentration.”
Obtaining the 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 you would have to claim back, as well as paying tax in France.
The solution here is to work with an adviser who has interim ISIPP strategies or tax reclaim procedures. “If the NT code is delayed, we help our clients retain full flexibility by either leaving their funds in the ISIPP, where they are Brexit proof and fully accessible,” said Daniel. “This means you can withdraw your money and get it sent wherever you reside.”
Hidden or excessive fees are another obstacle. “All investment products include fees and commissions that can erode your investment,” said Daniel. “We ensure clients select clean share classes, when available, and make them aware of all fees, particularly hidden commissions.”
At DTB Wealth Management, the fees are fixed, transparent and disclosed. The total setup, for a UK pension to SIPP, ISIPP and AV, is: ~£3,500 per transfer, plus £400 per extra pension involved, capped at £1,000, plus £400 to obtain the NT code.
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