Thank you Gabriel! So I did some playing about based on your suggestions and found the following.
Yes - rasterizing is the trick! Even better - there is a "Share to Notability" function I can switch on, which makes it relatively seamless.
Saving as JPEG is bad - because the "remove background" part doesn't work - but saving as a PNG file is great.
Ps If you hit Share and then choose "Save Image" which should save it to the iPads Camera Roll - actually Designer just plain crashes, no matter which format you are playing with. So thats not ideal. If you want it on your iPad you can do a Share to Notes. The image is then dropped into the Notes app - which is a fair workaround (although it would be better if it didn't crash).
Thanks again for this!