Self-Invested Personal Pension

The following is an extract from the Wikipedia entry Wikipedia – SIPPs. You may also follow this link for the Full License Terms .

A Self-Invested Personal Pension (SIPP) is the name given to the type of UK government approved personal pension scheme, which allows individuals to make their own investment decisions from the full range of HM Revenue & Customs (HMRC) approved investments.

SIPPs are a type of Personal Pension Plan. Another subset of this type of pension is the Stakeholder Pension Plan. SIPPs, in common with personal pension schemes, are tax “wrappers”, allowing tax rebates on contributions in exchange for limits on accessibility. The HMRC rules allow for a greater range of investments to be held than Personal Pension Plans, notably equities and property. Rules for contributions, benefit withdrawal etc. are the same as for other personal pension schemes.

Investors may make choices about what assets are bought, leased or sold, and decide when those assets are acquired or disposed of, subject to the agreement of the SIPP trustees (usually the SIPP provider).

All assets are permitted by HMRC, however some will be subject to tax charges. The assets not subject to a tax charge include:

• Stocks and shares listed on a recognised exchange
• Futures and options traded on recognised futures exchange
• Authorised UK unit trusts and OEICs and other UCITS funds
• Unauthorised unit trusts that do not invest in residential property
• Unlisted Shares
• Investment trusts subject to FSA regulation
• Unitised insurance funds from EU insurers and IPAs
• Deposits and deposit interests
• Commercial property (including hotel rooms)
• Ground rents (as long as they do not contain any element of residential property)
• Traded endowments policies
• Derivatives products such as a Contract for difference (CFD)
• Gold bullion, which is specifically allowed for in legislation

Investments currently permitted by primary legislation but subsequently made subject to heavy tax penalties (and therefore typically not allowed by SIPP providers) include :

• Any item of tangible moveable property (whose market value does not exceed £6,000) – subject to further conditions on use of property
• Other exotic assets like vintage cars, wine, stamps and art
• Residential property

I have special arrangements with the Premier Group and would be happy to talk to you about the suitability of a transfer of your UK Pension Plan to this SIPPs provider. Please contact me at any time without obligation.