Independent Trustee Company. Eoin Hassett

Transcription

1 Independent Trustee Company Eoin Hassett

2 Todays Agenda Ø About ITC Ø Current Pension Market Opportunities Pension Property International Pensions Ø Budget 2018 Update Ø Summary 2

3 Independent Trustee Company (ITC) Ø Ireland s leading provider of self invested solutions Ø 1.6Bn Assets under Trusteeship Ø 1bn Assets under Administration Ø Over 3,000 schemes Ø Strong Technical Capability 3

4 Our Approach The ITC Way A lifelong fiduciary (Trustee) relationship with the Adviser/Client Assets held in the strongest, most protected structures Assets not held on balance sheet of provider - No provider risk Ability to invest across the spectrum via LEAP into Financial Assets (Funds, ETF s Etc.) & via direct investment into real assets (Property) 4

5 Self Invested Pensions SSAS IORPS ITC have the full range BOB All Self Directed ARF/AMRF PRSA Ø Ø Assets not held on ITC s Balance Sheet Safest way to hold assets. Assets strongly protected against creditor attack. 5

6 Investment Possibilities Syndicated Investments e.g. Guaranteed Income Products Bespoke Investments e.g. Loan Note Investment Property Flexibility, Control, Lower Cost, Fully Transparent Regulated Investments - LEAP Funds, ETF s, and Equities 6

7 Property Rents & Capital Gains Tax Free in Ireland Residential, Commercial, Retail Streamlined Property Investment Process In-house Legal Team Works with Your Solicitor 7

8 Syndicated Investments Ø Capital Guaranteed Investments Ø High Coupon Investments Renewable Energy 8

9 Bespoke Investments Private Equity In-house legal team with expertise in structuring these investments Loans to companies Loans to fund property transactions 9

10 LEAP Ø What is LEAP - Leading Edge Advisor Programme Ø Key Features q LEAP Investment Platform - Investing in Funds, ETFs and Equities q Custodian is Pershing/Bank of New York Mellon - $28trn in Assets q Wholesale Pricing of investments q Can handle both pension and non pension monies 10

11 International Transfers Ø EU 4 Freedoms Ø IORPs Directive 2003 Ø Overseas Transfer Regulations SI 716 of 2003 Ø Ch. 13 & 24 of Pensions Manual Ø Tax Charge on PRSAs Ø Heathrow ARF and Bona Fides Ø O Sullivan Case 11

12 ITC International Maltese Pension Provider Joint Venture Between ITC & Maltese Financial Services Company First Company to be Approved for Both Company & Personal Pensions IORP s Approved Pension Master Trust in Malta Offers Significant Possibilities to Clients 12

13 Revenue Requirements EU transfers must be to an IORPS established in a Member State that has implemented IORPS Directive With scheme administrator resident in EU State Only Bona Fide Transfers acceptable Declaration by Member If Conditions met Revenue Approval not needed ü ü ü ü 13

14 What Can ITC International Pensions do for Clients? IORPs Examples Pre-retirement Tax Planning Cash Flow Planning Post Retirement Securing Pension Funds In A Crisis Increased TFLS Flexibility For International Executives 14

15 Malta Pensions Ø Benefits from Age 50 Ø Lump Sum at 30% Ø No Fund Cap Ø Flexible Draw down Ø Benefits on First Death 15

16 Example 1: Pension Planning Client Details: Jack, 40 year old business owner with 2m Pension Fund If pension stays in Ireland: If pension transfers to Malta: If Jack waits until 60 fund could exceed 5m giving EFT of 1.2m Jack can reduce tax by 400k by retiring at 50 but must sell shares etc. Pension Planning: 2m Limit Jack receives lump sum of 1.5m at 60 Set Drawdowns to suit lifestyle thereafter 16

17 Example 2: Pension Planning: Non Resident Annie, resident in Northern Ireland has maturing Irish pension benefit worth 300k If pension stays in Ireland: If pension transfers to Malta: Annie will suffer PAYE at source She will need to file a tax return and pay tax in UK. She will then need to claim tax back using Form IC9 from Irish Revenue. Income in paid gross in Malta. Annie just files and pays UK tax. 17

18 Example 3: Pension Planning: Portugal Jill, aged 60, has a Pension Fund worth 1m and is retiring to Portugal. If pension stays in Ireland: Jill will suffer Irish tax at source. If pension transfers to Malta: Jill receives 300k tax free. She sets her drawdowns at 30,000 per annum. Under the Non Habitual Resident regime in Portugal Jill can receive this tax free for 10 years In total Jill has received 600k free of tax. 18

19 Example 4: Pension planning: International Executive Ø Nick has received a job offer in California. He has a pension fund worth 500k in Ireland. Ø Nick is concerned that his pension pot will be taxed in the US. However he cannot transfer it to the US. Ø Nick transfers his pension pot to Malta. Ø Article 18 of the Malta US treaty provides that the Income earned by the Malta Fund is only taxed on drawdown 19

20 What Can ITC International Pensions do for Advisors? Examples Help win a new client - high net worth Protect your clients from attack Advisor seen by the client as proactive and creative Opportunity to charge a consultancy fee Trailer fee adds value to the business balance sheet Trailer fee continues to grow in tandem with client investments Retain strong investment advisory role ongoing 20

21 QROPS Ø HMRC regime for overseas transfers Ø EU residents can transfer to another EU country. Ø Non EU residents can transfer to country of residence. Ø If this doesn t apply or if it changes in first 5 years 25% transfer tax applies. Ø Any payments or deemed payments in first 5 years Transfer tax applies. Ø Benefits only to over 55s. 21

22 Lifetime Limit Ø UK system similar to Irish Excess Fund Tax. Ø Since 5 April 2016 Limit is 1 million. Ø Limit protection is possible if no contributions made since 5 April 2016 at 1.25m. Ø Further protection possible at 1.5 million if no contributions since 5 April

23 Brexit Impact on Irish Branches of Insurers Further restrictions on transfers Data Protection and Administration issues Possible impact on Investments 23

24 QROPS Market 1.5 billion in annual transfers 411,000 Irish in UK 255,000 Brits in Ireland Others including Brexit businesses moving to Ireland, previous returnees, Non nationals, Northern Irish 24

25 Example 1: QROPS Planning: UK Excess Fund Tax Mary, age 40, has UK pension worth 950k and has returned to Ireland. If she leaves it in UK it quickly exceed lifetime limit of 1million. She transfers to BOB in Ireland. Fund grows to 2.5million at age 60. UK Excess Fund Tax doesn t apply. Irish Excess Fund Tax doesn t apply. Benefit is not included in Irish Threshold calculation. 25

26 Example 2: QROPS Planning: UK Lifetime limit Joe, now aged 59, returned to Ireland age 40. His UK benefit is now worth 1.2 million. His Irish Benefits are worth 1.9 million. His target retirement date is 65. He transfers both benefits to Malta. No Excess Fund Tax in Ireland as fund is below 2m. No Excess Fund Tax in UK because he can claim Lifetime Limit Protection. 26

27 Budget 2018 Property and Housing Vacant Sites 7% Stamp Refund on Resi Dev land 6% Stamp Duty on Commercial Pre letting expense up to 5k per resi property Existing Mortgage relief extended S604A relief available after 4 years 27

28 Budget 2018 SMEs and Self Employed KEEP Key Employees SE Earned Income Credit Increased by 200 Farmers Land Leased For Solar is Eligible for CGT & CAT Relief Farmers Intra Family Transfers at 1% Stamp Duty 28

29 Budget 2018 Miscellaneous Employee Electric Cars Charities and VAT Sunbed Services PAYE Compliance 29

30 Questions? For further information please contact: Telephone: Website: