S615(6) IFA Guidance

S615(6) is a tax advantaged arrangement just like a SIPP or a SASS and can be administered independently or lodged on a wrap platform just like its Registered Pension counterparts. For multi-member schemes funded by regular instalments, it is recommended that a wrap platform operating a gross nominee account is used for administrative simplicity.

The first step in arranging a wrap account is to contact one of the platform Regional Sales Managers ("RSM") who will organise the Terms of Business with the platform.

The web link to Novia's RSM's is www.novia-financial.co.uk/sales-team.asp.

The wrap provider's terms of business and fund link details are available from this site.

The wrap platform with which s615(6) Limited deals will operate a Gross Investment Account ("GIA") avoiding the difficulties of recovering any tax deducted at source by investment operators. Once the platform has acknowledged receipt of the GIA application form the client will have the full fund range offered by the platform available to it without the need to justify the scheme's existence or comply with money laundering requirements with every fund management house chosen. This process needs only to be dealt with once only.

No Waiting For Acceptance

Because s615(6) Limited enjoys a strong relationship with the platform and has long experience of working with the Pension Schemes Office Overseas Schemes Section ("PSOOSS"), the platform will allow contributions to commence to the scheme immediately upon submission of the Scheme to the PSOOSS rather then waiting for the Scheme to gain acceptance. This may prove particularly valuable approaching company year ends or tax year ends in the country in which the employee is resident.

If you have a strong working relationship with a platform with which s615(6) Limited does not currently co-operate and would like to use that platform for s615(6) business, please contact s615(6) Limited to discuss. It is vital the platform offers a gross nominee service and it is worth addressing this with the platform operator as a first step.

Immediate Remuneration

As the intermediary, you will have advisory or discretionary powers over the underlying scheme assets depending upon your relationship with the client and your scope under the Financial Services Act 1986 if authorised by the Financial Services Authority, or by the relevant local governing body, if outside the UK. It is through control of the underlying assets that intermediary remuneration is generated.

Initial commission and fund based trail commission will be generated by the platform operator, paid directly to the intermediary under the terms of business arrangements between the platform operator and the intermediary.

There are two versions of a s615(6) Trust available from s615(6) Limited. The Scheme Rules provide for the same benefits but the trustee appointment is shaped by whether the principal employer to the scheme is prepared to act as trustee or not.

SG Hambros Corporate Trustees - For their stated fees SG Hambros Trust Company Limited are prepared to act as corporate trustee to the scheme. SG Hambros have two tiers of fees, depending on whether the trust assets are administered by SG Hambros Bank or on an independent platform. The role and responsibilities of the corporate trustees does not differ with internal or external administration but the complexity of tracking assets by either route determines the difference in pricing.

Establishing a scheme will require the following steps:-

1.   If you do not already have terms of business with the platform operator, contact the platform website to obtain the necessary application form.

2.   Complete either of the Trust Deeds dependant upon the needs of the employer.

3.   Complete a Member Application Form for each proposed scheme member. The Member Form should contain details of the initial contribution; it is not obliged to schedule the intended contribution schedule in any detail. New Members can join an established scheme at any time by the employer completing a Member Application Form for them.

4.   Have each member complete a Beneficiary Nomination Form. It is not necessary for the Beneficiary Nomination to be forwarded to s615(6). It may be that the member would like to keep the details of his elected beneficiaries secret. If this is the case, he should forward the Form in a sealed envelope marked "to be opened only in the event of my death" and dated, to the scheme Trustee. The importance of the date on the envelope and on the form itself is so that any changes to the Beneficiary Nomination submitted to the Trustees can be identified as the latest nomination. Beneficiary Nominations can be changed at any time by writing to the Trustees.

5.   Complete a platform application form establishing contact details of the Trustee and the asset allocation. A form is required for each member as a separate account will be established for each member. It is possible to establish a standard asset allocation either for each scheme or for each member, if required. This standard asset allocation will be used for each contribution received unless and until changed.

6.   An Employer Payment Schedule is required by the platform operator if the contributions are to be regular in terms of timing but irregular in terms of amounts. If regular contributions of a fixed amount are to be paid by direct debit mandate then this form is not required. If the contributions are to be paid in the form of a series of single contributions, this form will be required each time a payment is made to identify for which member's benefit the money is to be applied.

In establishing the scheme, all the forms should be sent to s615(6) Limited.

Any questions regarding the operation of s615(6) schemes and all enquiries regarding acceptance, regulations, membership, permissible assets, limits, trustee restrictions or any other scheme related questions, should be directed to s615(6) Limited.

Once the scheme has been established and platform account references identified to the intermediary, all future communications relating to contributions, asset allocation and distributions should be conducted on-line or directly between the intermediary and the platform operator.

New members added to the trust after the trust has been established will require a new wrap platform application form to set up the individual member's account. A new Member Application Form and Beneficiary Nomination Form should also be completed, the Applications to be forwarded to s615(6) Limited and the Beneficiary form to be retained by the trustees.

The platform provider will issue half yearly statements of account to the address they hold on their system for communication purposes. If in any doubt the intermediary will be entered here as the default option. If the corporate trustees should require their details to be entered here then they will receive the half yearly statements directly.

If in doubt, contact s615(6) Limited in the first instance.

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