SIPP(Self Invested Personal Pension)
Q. What is a SIPP?
A. It is a Personal Pension that is Self Managed. Instead of buying a ready made package from one of the insurance companies the purchaser pays an annual fee to a SIPP provider for a SIPP 'wrapper' and then fills it with permitted investments of their own choice.
Q. Why would anyone want one?
A. Primarily because they wish to have more control over the pension investments, or they simply want access to a wide choice of funds.
Q. What kind of investments?
A. Only those permitted by the Inland Revenue, i.e. mainly, Shares, Collective Funds such as Unit Trusts, or Commercial Property
Q. Can a SIPP borrow to buy a Commercial Property?
A. Yes, up to 50% of the schemes net assets may be borrowed.
Q. What about residential property?
A. Not allowed on an individual basis although it will be possible to buy as part of a larger syndicate
Q. Art, Antiques, Racehorses, Classic Cars?
A. As good as not allowed. These will technically be allowed but will be taxed so as to make an investment in them pointless.
Q. Can higher contributions be made into a SIPP than into a Personal Pension?
A. No, the rules regarding contribution levels and benefits taken at retirement are exactly the same as with a Personal Pension.