Treating Customers
Fairly: Reasons why you should use MW Pensions
These are fairly challenging times to work in the Financial
Services sector. The FSA are currently involving themselves
in their TCF initiative. Northern Ireland has been done,
the North West are currently being processed and apparently
it’s the turn of the North East next. Many companies
have been experiencing phone calls and visits.
Then, of course, there is the Retail Distribution Review
and their review of the SIPP market which will both have
far reaching implications for advisers and providers alike.
With this as the backdrop, I thought it might be worthwhile
to give you our take on TCF, and to remind you of our core
values:-
- Quality Service
- Client and Adviser Choice
- Transparency
The attached leaflet details our approach to supporting
these values. To view it, please click 
Advisers can have confidence that their clients will be
treated fairly and professionally, and that technical support
is just a phone call or mouse click away.
Nor are we resting on our laurels. As one of the fastest
growing SIPP Providers in the country (see Plimsoll Report
2008) we are continuing to invest heavily in people, training,
technology and infrastructure, and are actively working
to improve our standards. We are also working on a number
of online applications to improve access and communication.
If you would like to know more, please get in touch with
us.
Kind regards
Chris Williams
PS. Don’t forget that 75% of cash coming into SIPPs
comes via transfers from insured arrangements – the
funds are already there!
MW SIPP Administration
(IOM) Ltd
NEW QROPS TRANSFER SCHEME SUITABLE FOR UK EXPATS
We are pleased to announce the launch of the MW IOM QROPS
SIPP. This is a scheme based on the Isle of Man which is
able to transfer UK pension funds offshore and is now open
to:-
- IOM Residents
- Non IOM Residents
There is also no age restriction i.e. those over age 75
who have ASP concerns can move their pension scheme offshore
It will be of particular interest to those of your clients
who are looking to transfer their pension funds and who
are:
- UK expats with UK pension funds
- Planning to emigrate in the future
- Approaching 75 or have passed 75 and are in Alternatively
Secured Pension (ASP)
- Foreign nationals who have UK pensions
Unlike many other QROPS schemes, we are not specific to
only one country such as Australia. To us where the client
lives doesn’t matter as long as there is a UK fund
to transfer.
To see more detail please click]
The Isle of Man has its own tax regime:-
- Zero rate IHT
- Zero rate CGT
- No Stamp Duty
- Zero rate Corporation Tax
- Income Tax with a basic rate of 10% and a higher rate
of 18% (but income tax is capped at £100,000 per
annum, irrespective of how much you earn)
From 6th April 2008 the Isle of Man is changing its tax
treatment of pensions which includes:
- No need to buy an annuity at 75
- No tax on death before drawing any benefits
- If any benefits have been taken,7.5% tax on fund surplus
on second (for example, of surviving partner).
- 30% tax free lump sum
Any pension transfer would be done under QROPS rules (see
link above) and would be treated as a Benefit Crystallisation
Event by HMRC at the date of the transfer.
One of the conditions to being a QROPS scheme is that there
are reporting responsibilities by us as the Scheme Administrator
to HMRC for the first 5 years of any significant scheme
events. These would include taking any benefits e.g. tax
free cash and/or income withdrawal or the death of member.
The reporting requirement is not valid if a member has already
been living abroad for 5 years or more.
There is obvious potential here for good tax planning.
We do not give any tax advice nor do we advise on such matters
as residency and domicile. However, we are aware that such
suitably qualified advice exists.
This is a legitimate SIPP working within HMRC’s QROPS
rules and those of the Island. It is aimed at those genuine
cases of people who intend to be non-UK resident and non-UK
domiciled when they die, although the scheme is also open
to UK residents.
Please feel free to contact us to discuss any client issues
you may have.
Kind regards
Chris Williams
Director
High Interest banking Options - click
Tax year-end opportunities for SIPPS
TURN £6,000 INTO £10,000 :
SET UP A SIPP PRE-APRIL FOR AS LITTLE AS £250
The end of the tax year approaches. This gives you the
opportunity to save your clients tax by setting up a SIPP.
Consider the following scenario:-
Ø Make a personal contribution of £7,800
Ø We claim back £2,200 from HMRC
Ø A higher rate tax payer can claim back a further
£1,800
So for as little as a £6,000 outlay you can
have a pension fund of £10,000
AND YOU CAN DO IT TWICE!
For tax year 2006/2007 up to 5th April 2007
and
For tax year 2007/2008 from 6th April 2007
How much does a SIPP cost? (all fees subject to vat)
For funds up to £60k
ACORN SIPP Set up fee nil
Annual fee 1% of fund (minimum £250, maximum £600)
For larger funds
FULL SIPP Set up fee £350 (nil for transfers from
other SIPPs)
Annual fee £600
What else?
Ø No transfer-in charge for ACORN
Ø Capped transfer-in fee with full SIPP
Ø No transaction charges for contributions, investments
or consultation
Ø Online application form
Ø Fully downloadable documentation
Ø Wide investment choice including residential/overseas
property (in GDCV)
Ø Your fee can be taken from the fund
What are the next steps?
Phone me Chris Williams on 0151 328 1777
MW SIPP PROPOSITION: AN UPDATE
We have developed WHAT WE BELIEVE TO BE A UNIQUE PROPOSITION,
on the following principles:
- Client and Adviser Choice, of both
SIPP and Investment
- Quality Service
- Value for money and transparency
This is underpinned by outstanding technical and professional
support and market-leading technology.
1. CLIENT AND ADVISER CHOICE
There is now a unique choice of two SIPP options: both
now online set up with full documentation
- MW ACORN SIPP - a starter SIPP for smaller funds (cheaper
than a Stakeholder !!)
- MW SIPP2 - the full SIPP option (including Exotics !)
There is a choice of banks for competitive high interest
banking and a choice of the type of account, from instant
access to 12 months fixed. We believe this is unique in
the marketplace with a rate of at least 0.25% below base
for instant access and a further choice of rates for longer
term deposits
There is a wide choice of investments, from the full quoted
shares and insurance product options with Acorn to the complete
choice for the full SIPP, including commercial property,
gold bullion, unquoted shares and investing in residential
property using Genuinely Diverse Commercial Vehicles.
2. QUALITY SERVICE
We are not and will never be a call centre. You will always
deal with the same people.
We offer
- Personal service and consultancy by specialists
- Technical advice and support (but not financial advice)
- Regular newsletters and updates
- Website resource including a wealth of downloadable
information
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- Trustee meetings with you and your clients
3. VALUE FOR MONEY AND TRANSPARENCY (MORE DETAILS ATTACHED)
- No hidden fees, commissions or “turns” on
bank accounts
- Clear competitive fee and service structure
- Full SIPP fee is fixed regardless of fund size
- Acorn has no set up fee, no transaction charges and an
annual fee of 1% of the total SIPP fund, with a minimum,
but also a MAXIMUM fee
- No additional fees for investments or contributions
made
We do not give financial advice, nor do we take commissions.
Where we don’t charge a set up fee, clearly you are
free to do so, and to take commissions for investments or
mortgages. With the client’s agreement, your fees
can be paid from the fund. Please call if you wish to discuss
further.
PLEASE READ
TO FIND OUT MORE ABOUT WHAT IS, WE THINK, A UNIQUE PROPOSITION
IN TODAY’S SIPP MARKET PLACE.
Kind regards
Chris Williams
FINAL SALARY SCHEMES: SEVERAL MORE NAILS IN THE
COFFIN?
Some new issues have emerged recently, and
have yet again increased the scope, responsibility and challenge
for Scheme Trustees
This
covers the following topics;-
- Pension Regulator’s view of funding
– a recipe for business confusion?
- Scheme funding assumptions and “prudence”
- a double whammy!
- “appropriate” funding of
shortfalls – when is a deficit not a deficit?
- PPF levy – more costs and trustee
responsibility
- Contingent funding – trustees as
corporate financiers?
- Investing scheme assets – a different
view
- The issue of transfer values
- The BA effect
All important stuff if you’re a businessman,
a trustee or an adviser, and if some of our comments seem
unduly jaundiced, we feel that with some of these measures
the already beleaguered Final Salary sector is being beset
with a proliferation of increased costs, poorly drafted regulations,
probable errors, and lack of commonsense or joined-up thinking.
It is hard to believe that this is what was intended.
Unfortunately it doesn’t end there. The position
of trustees, already difficult, is becoming untenable. An
MBA will soon be the lowest qualification for a trustee
to have
In addition, it is likely that confusion and misinformation
will engulf boardrooms regarding future financial obligations.
How can you value a business?
If you have any comments or queries please don’t hesitate
to contact us.
Kind regards
Chris Williams
Director
Ps. We can offer corporate schemes
a holistic service of essential trustee, consultancy and
legal services, and full actuarial and administration services
at competitive and transparent fee levels.
BUDGET 06 UPDATE AND HMRC UPDATE
ON INVESTMENT IN RESIDENTIAL PROPERTY
The Budget passed without any major shocks
or alarms. In fact from a pensions point of view, detail
was rather thin on the ground. However, subject to the Finance
Bill 2006, (expected in the first half of April) the following
issues were either clarified or confirmed;-
IHT treatment for pension surpluses
– the Family SIPP
Recycling of tax-free lump sums
Unquoted shares (caution advised in the short term)
The main provisions of A day seem to be confirmed eg contributions
limits, ASP, etc
All of the above is covered inr.
On Friday 24th March, HMRC released details
of the definition and tax treatment of residential property
within SIPPS and SSASs
The main point is that direct investment
in residential property, both here and overseas, is permitted
by SIPPs and SSASs, in certain circumstances.
covers the above.
Again bear in mind that these are “draft”
documents at this stage and will doubtless feature in the
Finance Bill. However, on the face of it there has been
an outbreak of commonsense. The full details can be found
on www.hmrc.gov.uk/pensionschemes/draft-guidance.pdf .
SIPP OPPORTUNITIES
FOR CLIENTS AND ADVISORS
A DAY is approaching rapidly, and the changes
that come into force offer major opportunities for advisors
and their clients. In the last few months we are already
noticing the following trends;-
- SIPPs being set up for property
already owned
- SIPPs being set up ready for
larger contributions
- smaller funds being transferred
in from insured arrangements
- growing interest in overseas
commercial property investment
There has been a noticeable increase both in
volumes of and interest in SIPPs, and the movement away from
insured arrangements gallops apace
Consider the following changes and the huge opportunities
they open up:-
- Connected Parties rule change
- new rules on contributions, company
and personal
- rules on in-specie contributions,
- rules on annuity purchase
- Family SIPP (after clarification)
- 25% tax free lump sum
- investment in unquoted shares
(cautiously until April)
We have attached a newsletter outlining the
changes with some examples of how they might be applied. We
have further examples if you’d like to discuss them.
We’ve also attached a newsletter which is suitable for
clients, existing or potential. Please feel free to adapt
it. (If you would like a copy in word format, for ease of
adaptation, please let me know).
We are also willing to support advisors at seminars/briefings
etc if required. Don’t hesitate to contact us
Regards
Chris Williams
Director
SIPPS FOR ALL!
Self Invested Personal Pensions have been
around for about 15 years. They have increased in popularity
over the last few years, with 2005 being by some way the
biggest year so far.
SIPPs as they are known are set to grow
even more the next several years, as they become increasingly
“mainstream”
There are a number of reasons for this;-
;-they allow you to control your own investments
;-conventional insurance arrangements are seen as expensive
failures
;-they are flexible allowing a wide range of investments
;-fee structures can be transparent(but take care!)
;-they are relatively simple structures – “wrappers”
for your investments which allow you to build your own pension
;-you can invest in commercial property
;-there are extremely generous tax advantages
One of the reasons SIPPs are becoming so
popular is that from April 2006, all existing pensions legislation
is being scrapped – “simplified” This
is known as A day – “appointed day”-when
many new things become possible for SIPP investors. The
reason for the change is essentially threefold;-
;-the existing rules are far too complex
;-as a nation we are not saving enough for our retirement
;-as a nation we are living longer
This is generally known as the “Pensions
Timebomb”, although you can insert the doomladen word
of your choice here.
For the last couple of years, the main aspect
of the A day changes that has been given extensive media
coverage has been to include residential property, both
in the UK and overseas, as a permitted SIPP investment.
This decision was rescinded in December 2005 by the Chancellor
on the pretext that abuse of the tax rules and mis selling
would ensue – a total nonsense but we are where we
are.
One of the byproducts of the media coverage was to get the
term “SIPP” into the public consciousness, and
if we are to believe the reports, as a hot topic for the
dinner table.
In reality, residential property would only
have accounted for a small proportion of new SIPPs being
created. The changes and opportunities of A day are far
reaching and profound and are meant as an incentive or encouragement
for people to save more for their retirement
For the first dozen years of their existence,
SIPPs were predominantly a vehicle for high net worth individuals
to accrue their tax free benefits, quite legitimately. But
increasingly over the last couple of years average SIPP
fund values have been dropping as more and more people become
aware of the benefits and advantages of a SIPP
Let’s face it, the whole aim of A
day is to get as many people as possible to start to take
more responsibility for their own prosperity in retirement.
Almost by definition the more people who do this, the more
initial fund values will drop and the more successfully
will A day be regarded
Pre-Budget
Report 2006
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What
is a SIPP
A SIPP (Self Invested Pension Plan) is a
financial vehicle that allows individuals to acquire and
accumulate assets in a “fund” of their own designed
to meet their specific retirement needs.
About SIPPS
Chancellor Gordon Brown introduced legislation in the 1989
Finance Act that made SIPPs possible. SIPPs have been around
for some years. Currently there are some 120,000 individual
SIPP schemes in place and many commentators believe that,
given the changes to SIPP legislation in the 2004 Finance
ACT, there will be as many as 500,000 by 2010. The most
notable aspect of the 2004 Act was further changes to the
Tax benefits for individuals which are
now very attractive indeed and the permissible investments.
SIPPS remain an ideal way of building wealth over a long
period.
In its pure form (eg The MW SIPP), there is the opportunity
for freedom of investment, including commercial property
and, from 6th April 2006, residential, buy to let and foriegn
property. Most people can have a SIPP providing they are
less than 75 years old are a UK resident or resident overseas
as a Crown Servant or the spouse of a Crown Servant and
have relevant earnings or can transfer funds from another
scheme. Investors can be employed or self employed.
Governments of all hues love to “tinker” with
our financial plans so no one can be sure of what new changes
may come along and few of us have the time or know how to
enable us to truly monitor our pension arrangements. For
this reason and because we are not regulated by the Financial
Services Authority and so cannot offer anything other than
generic advice about SIPPs we will refer your enquiry to
two firms of Independent Financial Advisers who can analyse
your particular situation and make recommendations to you
with regard to your retirement plans. You, of course, decide
which to retain as your advisor. If you already benefit
from Independent Financial Advice then please indicate this
when you complete the enquiry form.
What is the "MW SIPP"?
- A Personal Pension Scheme approved by
the Inland Revenue, with a whole realm of benefits and
a great deal of flexibility
- Is available to you whether you are
employed or self-employed
- Enables its owner to invest towards
retirement in a tax-free environment.
- Funds can be invested in a wide range
of assets (subject to certain provisions), including:
- Stocks and shares
- Overseas stocks and shares
- Futures and options
- Commercial Property
- Land
- Insurance Company Funds
- Deposits
- Authorised unit trusts
- Shares in an open-ended investment company
- Traded endowment policies
SIPP Specialists Limited and
the MW Self-Invested Personal Pension (MW SIPP)
Through our subsidiary SIPP Specialists Ltd, we provide the
MW SIPP. As stated above this is an Inland Revenue approved
personal pension scheme. The fee structure is completely transparent,
with no small print. The services we provide are equally explicit,
and our administration is we believe the best in the industry.
We are specialists in purchasing property using SIPPs.
Tax Planning.
The MW SIPP offers the opportunity to take full advantage
of up to 40% tax relief and growth is not subject to Capital
Gains Tax.
- Any contributions you make to the MW
SIPP qualify for tax relief at your highest rate. This
means that, if you pay tax at 40% on part of your income,
for each £100 invested you would only actually pay
in £60 This means that the government is, in effect,
giving you back £40.
- The MW SIPP is free from Capital Gains
Tax. This means that you receive the benefit of the whole
of any investment growth
- At retirement a “lump sum”
of up to 25% of the whole value of your Pension Plan can
be paid to you completely free from Income and Inheritance
Tax!
- If you are employed then contributions
made to the MW SIPP , by your employer, are allowable
as Corporation Tax deductions
When the inevitable happens in many circumstances
the whole of the value of your MW SIPP can be paid out to
your family or other dependants free from Income Tax. Above
all the MW SIPP is designed to provide you with income in
retirement.
- Your MW SIPP is divided into equal parts,
so you could take benefits from part or parts of the investment
but not all, phase your retirement or partially retire.
- When all of the parts are used to pay
your benefits, you can take up to 25% of the value as
a tax free cash lump sum.
- Unlike other existing Pension Plans,
where legislation demands that when you decide to retire
you must buy an annuity at the then prevailing return,
after you have taken the tax free cash the remainder of
the fund can provide income by either the purchase of
an annuity from an annuity provider or by withdrawing
income directly from the fund
- An annuity will normally guarantee a
level of income for life whilst income withdrawn from
the fund may change depending on the investment return
and your income requirements. Whichever method you choose,
you will probably want to take some advice about both
the advantages and disadvantages of each approach. This
will help you to decide the method most suited to your
needs and objectives.
- You can start to draw benefits from
the fund at any time between the ages of 50 and 75.
- Income withdrawal can currently only
continue until age 75, when the remaining fund must be
used to buy an annuity.
- The MW SIPP will continue to allow you
to invest assets in all of the available ways.
