International financial advice firm Globaleye has apologised for inaccuracies in a pension guide on the company’s website.
Tim Searle, chairman of Globaleye, said his firm gives the most up-to-date information it can and added: “With the fluidity of Qrops/Qnups [Qualifying recognised overseas pension schemes/qualifying non-UK pension schemes], it is easy to get out of date”.
He made his comments following a report by FTAdviser that rival advisers had complained about a “misleading” guide on his company’s website.
Mr Searle said: “What our clients get and what is on the website is completely different. I’ll apologise for the inaccuracies up there – we are reviewing them at present. It is one of the tasks the marketing team is doing now.
“We have an ongoing battle with making sure it is up-to-date. We are not a robo-advice or transactions company.” He added that Globaleye clients had to sit down with an adviser.
James Pearcy-Caldwell, chartered financial planner at Aisa International, said that information in the guide, which was still able to be viewed on Globaleye’s website last week, was “largely out of date, misleading or inaccurate as different rules apply for different age groups and different countries.”
The guide stated: “In the UK, all pensions have income tax deducted at the basic rate before they are paid out to the pensioner, whereas Qrop income will be taxed at the rate applicable to the country that the Qrop is based in.
“Due to double taxation agreements this can sometimes be zero per cent.”
Christopher Lean, an IFA based in the Czech Republic, said this information was misleading, pointing out that the level of taxation applied on pension income will depend upon the country where the pensioner is the tax resident, the jurisdiction where the pension is based and the double taxation agreement between those two states.
Mr Pearcy-Caldwell said the guide ignored the initial £10,000 or so of income that comes under the personal allowance in the UK, which is taxed at zero per cent.
The guide also stated tax penalties applied if a pensioner returned to the UK within five years. But Mr Lean questioned what tax penalties existed. Mr Pearcy-Caldwell said he was unaware of any tax penalties applied by the UK to repatriates.
Another inaccuracy was the following statement: “If you leave your pension in the UK in a Sipp, for example, you will pay your highest marginal income tax rate on the income taken – whereever you are in the world.
Mr Lean said: “This is nothing to do with UK Sipps, but how pensions are taxed, and Qrops income should be declared and taxed too.”
In addition, the guide claimed that a tax-free lump sum of up to 30 per cent could be drawn down from a pension, leaving 70 per cent for a regular income. However, Mr Lean said UK advisers referred to it as a pension commencement lump sum, and that other countries taxed this lump sum.