Welcome to the X-O SIPP

With a fixed dealing fee of £5.95 and a fixed Annual SIPP Administration Fee of £95 (plus vat), the X-O SIPP offers the independent investor exceptional value for money.

We have combined the simple, award winning, execution-only sharedealing account of X-O with the efficient administration services of >Liberty SIPP Limited to bring you the X-O Sharedealing SIPP.

Look at the benefits:

*as this is an execution only product we will not accept transfers from occupational pension schemes

1. Overview

2. Q&A - How to use X-O SIPP

3. Account Charges

4. Terms and Conditions

1. Overview

The X-O Sharedeling SIPP has been designed for ease of use and transparency of costs for those investors who want to take control of their own pension planning. As an execution only product, it is only suitable for those investors who do not require any pension advice. The X-O SIPP is tailored for online dealing in stocks and shares only. For further details on how to use the X-O sharedealing

Who are Liberty SIPP Limited?

Liberty SIPP (Liberty) were established in 2007 and are fully authorised and regulated by the Financial Conduct Authority. They share the same values as Jarvis and their approach to the SIPP marketplace is to provide an easy to understand and cost effective product – they believe that managing a SIPP should be a straightforward task without encountering the frustration of small print, hidden charges, impersonal service and literature written in confusing 'pension speak'.

What is a SIPP?

SIPP stands for Self Invested Personal Pension. It is a personal pension as opposed to an occupational scheme which is set up by your employer.

It is a defined contribution pension scheme (also known as a “Money Purchase Scheme”). The level of pension that is paid out to the individual is dependent on the total of money that has accrued from contributions paid, be it by the individual or the individual’s employer, plus any return gained from the investments made with the contributions received.

There is another way a pension is calculated under a defined benefit scheme, also known as a “Final Salary Scheme” and can only be offered by an employer. The level of pension is calculated as a percentage of your earnings with that employer e.g. the pension amount is known, the fund value required to provide this pension is the varying factor. Where this scheme received contracted out monies from Her Majesty’s Revenue and Customs (“HMRC”) there will be a Guaranteed Minimum Pension (GMP). Quite simply, you are guaranteed to receive a minimum pension amount on retirement to replace your State Earnings Related Pension (“SERPS”). (Protected rights will be explained later)

All pension schemes need to be registered with HMRC to enjoy the tax privileges currently available under this Government. Registered pension schemes benefit from tax relief on contributions. In addition, the investment returns made on the assets held by the SIPP are not subject to income tax and on the sale of the asset, there is no Capital Gains Tax (CGT) liability.

How are funds accrued?

Contributions are paid by you as an individual from your earned income or by your employer. All personal contributions are paid into the pension scheme net of income tax as the money received will have already had income tax deducted. As pension contributions are tax exempt, Liberty SIPP will reclaim basic rate tax from HMRC on your behalf and apply this money direct to your SIPP. Any employer contributions received by the pension scheme are considered to be paid gross of tax as this is offset against the company’s tax liability at the end of the tax year.

The contributions received by the pension scheme are then automatically credited to your SIPP for you to invest in stocks and shares.

With an X-O Sharedealing SIPP, you decide on the investment strategy. Unlike some other personal pensions such as ones offered by insurance companies, where you select one of their funds to invest your money into, the X-O SIPP allows you to invest in all UK listed stocks and shares.

What is my involvement within the SIPP?

The SIPP is set up under discretionary trust. This means that in the event of your death, the fund within your SIPP does not fall into your estate and hence is free of Inheritance Tax (IHT). You will be appointed co-trustee with Liberty Trustees Limited to act as trustee to the assets held within your SIPP. Therefore, you will be registered co-owner to all the SIPP assets and hence your signature will be required for any amendments/payments from these assets. This includes the SIPP bank account. As a result, if payments are to be made from your bank account, such as paying out your pension, Liberty will send you a payment instruction for signing. This will also need to be countersigned by Liberty Trustees Limited before any payment can be made.

What happens when I move funds from my other pension schemes to the SIPP?

If you inform Liberty that you wish to transfer pension funds from other schemes of which you are a member, Liberty will contact these companies for you. As the funds that would have provided you a pension from the original schemes will have been transferred to the SIPP, rather than receiving a pension from the original scheme, the SIPP will pay out your pension instead. In short, assuming you transfer all the pension schemes to which you have been a member, you will only receive a pension from the SIPP as opposed to from a number of different sources.

There will be various forms that the transferring pension schemes will require you to sign for these transfers to take place. Liberty will request these on your behalf and forward them to you to sign – we will fill in all the other parts giving details on where the money is to be transferred.

Please note that Liberty SIPP do not reclaim tax relief on transfers into the SIPP from other pension arrangements as any tax relief entitlement from contributions paid would have already been reclaimed by the transferring scheme.

What is meant by Protected Rights?

Protected Rights are the name given to funds that have accrued from contracting out of the Second State Pension (S2P) which was very popular in the 1980s. HMRC pay into the pension scheme a proportion of your National Insurance contribution which would have counted towards your S2P, known as rebate contributions.

Where you have been a member of a Defined Benefit Scheme, where you were contracted out, there will be a Guaranteed Minimum Pension (GMP) attached to it. When these are received into the SIPP, they will be treated as Protected Rights benefits.

The SIPP is able to hold both Protected Rights and Non-Protected Rights, but we are required to hold these funds separately from one another. For clear audit purposes a separate bank account with RBS will be opened to hold any Protected Rights we receive.

It is important to note that on transferring GMP into the SIPP, you lose your entitlement to be provided with a guaranteed pension amount.

For example and illustration purposes only:

Under a scheme GMP is £4,000 pa, the fund required to purchase an annuity to provide this to you costs £68,000 (annuities are explained later) and the total fund value allocated to you is £150,000. On transferring to the SIPP £68,000 will be treated as Protected Rights and £82,000 as Non-Protected Rights.

How do I take my pension from the SIPP?

The objective with any pension scheme is to provide you with an income throughout your years in retirement. Hence why we won’t charge you for the pleasure. On retirement, you have two options; purchase an annuity from a life office or “drawdown” a pension from your pension scheme.

An annuity is purchased from a financial institute, normally a life office, and in exchange for a lump payment they guarantee to pay a regular amount to you for a fixed term. With retirement annuities, the term is for the remainder of your life and is known as a secured pension. The amount of pension paid is dependent on the amount you pay to the life office; the larger the initial payment, the bigger the pension. From there on, it is a gamble; if you live longer than the life office anticipate, the total amount for pension payments you received from the life office will have exceeded the purchase price of the annuity. Hence, you win as the life office has agreed to pay your pension until you die. Conversely, if you die before the life office expect, the total amount of pension you would have received will not have exceeded the purchase price of the annuity and the life office wins as it keeps the residual fund.

There are different types of annuity you can purchase which offer varying levels of protection in the event of your death, but the more protection you opt for, the less pension you get for your money.

There are two types of drawdown pension you can take once you reach age 55, capped drawdown and flexible drawdown.

In capped drawdown you can fully “crystallise” your funds or opt to crystallise a percentage of your fund. Either of these two options will enable you to take a maximum of 25% of the crystallised fund as a tax-free payment, and anywhere between 0-100% of the recommended pension amount based on Government Actuary Department (GAD) rates. You can choose to receive your pension monthly or less frequently, but at least every year, and it can be paid in advance or in arrears.

Flexible drawdown allows you accelerated and unlimited withdrawals of your pension fund if you can meet certain income requirements. This requirement is known as the minimum income requirement (MIR) and will be set at £20,000 (to be reviewed at least every 5 years). The minimum income can comprise of one or more of state pensions, annuities and scheme pensions (where the schemes have over 20 members) that are guaranteed for life.

You don’t have to take the same level of pension you originally elected to take, and you can vary this depending on your financial circumstances. When you are aged between 55 and 75 we will revalue the recommended pension amount every three years and advise you of any adjustments required for the pension to stay within the limits. This will happen on an annual basis when you reach age 75.

Please be advised that neither X-O nor Liberty SIPP Limited can provide you financial advice as neither are regulated to do so. If you need advice as to which option is best for your financial situation, you must speak to a financial adviser.

How do I apply for an X-O SIPP account?

How to use the X-O SIPP

A. How do I move funds into my sharedealing SIPP account?

Any funds that you have transferred or contributed will automatically be sent to your X-O account and made available for dealing. If you would like to transfer an existing pension into your X-O sharedealing SIPP please inform Liberty that you wish to do so HOW??.

If you would like to contribute into your SIPP please fill out the contribution form online (have a link here), print it out, sign it and send it to Liberty SIPP Ltd. We will then reclaim tax relief on your contribution and all monies will be made available in your dealing account as soon as possible. Please not that it can take up to 6 weeks for HMRC to reclaim the tax relief on pension contributions.

B. How do I transfer my SIPP that I have with another stockbroker?

As you can transfer cash from existing pension schemes into your account, you can also transfer in existing UK stocks and shares that you may hold with another stockbroker. These work exactly the same as cash and once you have informed Liberty HOW? that you wish to transfer them we will start the necessary process and we will notify you when the transfer has completed and the assets will show up in your X-O sharedealing account.

You can also contribute existing portfolios into your X-O sharedealing account, reclaiming tax relief as you would for cash HOW??.

C. What are your charges?

Our simple and transparent SIPP charges can be found by clicking here.

D. When can I start dealing?

Once all your transfers or contributions have completed we will send you a confirmation email with your account log in details. When you first log in you will be prompted to change your password, please do so for security reasons. Once you have logged in, your pension monies will be in your account ready to deal and you will be able to view any existing assets you have transferred/contributed into the SIPP.

E. What are the risks?

As an execution only client, any decisions on investments are purely your own choice and Jarvis Investment Management will not provide advice on these investments. We will execute the transactions for you only. You will therefore be responsible for loss with the investments chosen. Please ensure you fully read and understand the risks involved in any decision you make. If you have any doubt whether any investment is suitable for you, you should obtain expert advice.

F. Is there a minimum size or order?

No, not at all. Provided you have funds on your account you can deal up to the value of those funds.

G. What markets can I deal in?

You can buy and sell shares in most companies that are listed in the UK. This includes dealing in equities, bonds, ETFs, investment trusts, shares listed on the IRS (International Retail Service) and CDIs of US stocks. Please note that you cannot deal in foreign shares that are listed on overseas markets. If you wish to invest in a CDI of a US stock you will need to complete a Form W-8BEN before you can trade. Click here to download a form and quick completion guide. Alternatively, a full version of the IRS instructions to completing a W-8BEN form can be downloaded by clicking here.

H. How do I place an order?

Placing an order is very easy. First select whether you want to buy or sell (you can only sell if you already hold the shares in your portfolio). Add the symbol of the stock – this can be found using the Stock Information button on the left hand side of the screen. Decide if you are trading a quantity of shares or a monetary value and then enter the quantity of shares or value of money in the appropriate box. Finally, choose whether you want to trade straight away (’at Market’) or set a limit, enter your Trading PIN and click on the ‘Next’ button.

A price will be displayed together with a breakdown of the charges. You will then have 15 seconds to decide whether you want to accept the price or not. If you do want to go ahead and execute the deal, simply press the Accept button and the order will be executed. Your account will be updated automatically and an email contract note will be sent, confirming the details of the trade. Please also refer to the Online User Guide by clicking here.

I. Will I get a share certificate?

No – this is a nominee account which means that the shares are held electronically in a pooled nominee account .

J. Can I transfer in share certificates I hold in my possession?

Yes - , please contact Liberty HOW?? for these to be added to your X-O sharedealing portfolio.

K. Limit orders and Stop Losses

You can place a limit order to buy shares when the price at which you are prepared to buy is below the current market share price. Alternatively you can place a limit sell order when the price at which you are prepared to sell is above the current market selling price. Should this price ever be reached, your order will be dealt automatically. Your limit order will be held for the time period that you specified. Please note that you are responsible for cancelling these orders. Stop losses can also be set to help you limit any loss. If you are unsure about the use of limit orders or stop losses, please call our dealers who will be happy to help you. Please also refer to the online user guide. Please note that limit orders in the currencies EUR or USD can only be held for the day and will be cancelled at 4.30 on that business day.

L. What is a contract note?

This is a confirmation of your transaction and is sent out to you via email immediately after you have traded. Please note, you may need to set your email security parameters to accept this email. The email address that will appear is omx-documents@omxss.net.

M. How secure is the account?

As you would expect, all the information sent between you and our offices is encrypted giving you total peace of mind.

N. When will I receive my dividends?

Dividends are normally credited to your X-O account on the day we receive them from the registrar.

O. If I move, how do I change my address on the account?

If you are moving, please email us at enquiries@x-o.co.uk with your new address details. Once we have received them, your account will be updated within 24 hours – please make sure you quote your account number. Who notifies Liberty – need to check the procedure.

P. Corporate Actions

We will notify you in writing of any corporate actions.

Q. How do I access my account statement?

Once you have logged in, click on Statement Details to see all monetary transactions for your X-O account. These are updated immediately a trade has taken place. Order History will give you details of the individual trades, showing you the quantity of shares, the price and the final settlement figure.

R. Company Reports

You can obtain free company reports by clicking on the following link http://yahoouk.ar.wilink.com

S. do I contact if I have any questions?

For sharedealing queries: You can email us at enquiries@x-o.co.uk. Alternatively you can contact us by phone or in writing using the details which can be found in the Contact Us section. For SIPP administration queries: Check with Matt

T. At what times can I trade using X-O?

You can trade during normal London Stock Exchange market hours – from 8.00am until 4.30pm, Monday to Friday (but not on Bank Holidays).

T. Do you have a list of links to useful sites?

Please navigate to the Useful Links section of the website.

X-O.co.uk is a brand name of Jarvis Investment Management Ltd (Jarvis), which is authorised and regulated by the Financial Conduct Authority. Jarvis is a member of the London Stock Exchange and PLUS, and is an HM Revenue & Customs Approved ISA Manager. Registered office: 78 Mount Ephraim, Tunbridge Wells, Kent, TN4 8BS. Registered in England number 1844601. VAT registration number 680 0400 74