Self Invested Personal Pension (SIPP)

Self Invested Personal Pension (SIPP)

Self-Invested Personal Pensions (SIPPs) are subject to the normal rules and regulations for registered pension schemes, but offer the freedom of choice over investment management, whilst keeping the administration in one place. This means that you are able to change the investment manager when you wish, without incurring the expense of changing the provider of the administration. 

As a central ‘hub’, a SIPP allows the member full investment flexibility and, subject to pension legislation, access to (but not limited to) the following investment vehicles:

  • Stocks & Shares, OEICs, Unit Trusts and Investment Trusts
  • Cash Accounts
  • Structured Products
  • Trustee Investment Plans
  • Discretionary Fund Management
  • Direct Purchase of Commercial Property

Unlike a Personal Pension, a SIPP is also able to borrow up to 50% of the scheme assets in order to boost its purchasing power.  This is particularly useful when purchasing a commercial property, as the lender will usually require a first charge.

Many business owners consider the purchase of commercial property using their pension funds.  In doing so, the building is rented back to the business at market rates and so the rent is funding your retirement plans rather than a third party.  Rent is an allowable expense for Corporation Tax purposes and does not count towards your Annual Allowance.  Therefore, this can represent a significantly tax-efficient vehicle for many business owners.

To discuss this further, please contact us.