SIPPs

Self-Invested Personal Pension

A SIPP is a type of personal pension scheme that gives the member control to choose how their pension funds are invested. It can be established by any individual of any age, even if they are not actually employed or resident in the UK.

One of the major advantages of a SIPP is that you can transfer in other-pensions: this allows you to consolidate and bring together your retirement savings in one, tax efficient wrapper. Making it simpler for you to manage your investment portfolio and make regular investment reviews easier.

SIPPS offer tax relief of up to 50% on contributions and there is no Capital Gains Tax or Income Tax to pay. You may make unlimited contributions to your SIPP, but you will only get tax relief on contributions up to certain limits. In principle, from the 2011/2012 tax year the maximum total contributions to all pension schemes by an employer, individual and any third party will be £50,000.

Information on SIPPs and contributions can be found directly on the HMRC website; www.hmrc.gov.uk

What investment products members can invest their SIPP funds in to depend on whether the asset itself is classed as an allowable investment by HMRC. Additionally, not all SIPP providers will allow investments to be made in to, say, commercial property or unquoted shares. The most flexible SIPP providers will allow members to invest all investments as permissible by HMRC.

In a full SIPP there is a wide range of investment options that you can invest in such as:

• Stocks & Shares
• Unquoted Shares
• Commercial Property (such as shops, factories or office premises)
• Overseas Property (such as hotel rooms and land)
• Investment trusts
• Mutual Investment funds
• Deposit accounts with bank and building societies
• Insurance company funds
• Government securities
• Structured Products
• Loan notes

It is important to remember that there are additional costs involved when investing in some of the assets listed so it is important to understand these costs and seeking professional financial advice.

Emerald Knight has worked alongside a number of UK SIPP Trustees and has had SIPP approval for several of the products we distribute. For further information, contact us