Sipp Advice

SIPP Advice, what you need to know?

There has been some news in the press of late about how it may be possible to invest your pension in an investment property using a SIPP – or rather how to purchase a property using a SIPP for your existing pension.

What most people don’t yet fully understand is how it is possible to use a SIPP as SIPP`s and the process of setting up a SIPP can be complicated and to help with the process of setting up a SIPP it is important to seek out a reputable financial management company who has a licence to offer SIPP advice. We can link you to a reputable and fully qualified SIPP Independent Financial adviser. Any company offering SIPP Advice that does not hold the necessary qualifications is not permitted to do so and would be breaking Financial Services Authority Rules.

The SIPP adviser will be able to communicate directly with you and your pension provider and provide a statement of the full costs associated to investing your pension through a SIPP. Once this is provided, only then can you decided if you really want to invest your pension through a SIPP. The SIPP adviser will be able to identify the full costs of investing your pension through a SIPP, and provide you with a regulated overview as to the full risks, advise you accordingly and only then can you make an educated decision to invest your pension using a SIPP.

Although many people would like to invest their pension in a property not all pensions can be invested using a SIPP, so you should seek SIPP advice from our experienced advisor.

The goal of any SIPP Advice provider?

The goal of any SIPP provider is to have the full cost and risk of the investment explained in detail. Although it is not impossible to achieve this by yourself, it is a lengthy and complicated process and one that really requires the experience and expertise of a SIPP advisor that is authorised by the Financial Services Authority. Their goal is to ensure they follow the correct procedures in order to provide a comprehensive explanation in terms of the risks and rewards. There is a lawful process that needs to be adhered to when providing SIPP advice with regards to the information being released under the FSA regulations. There is also a recognized SIPP provider that your pension company permit your pension to be invested through. Another vital component to maximize the success of SIPP is ensuring you choose a financial advisor who has a track record and the adviser we work with has a wealth of experience in the SIPP and Pension market.

This means that you, the investor, are given the best possible chance of achieving the returns on investment you require in order to have a happy retirement. A SIPP advisor will only agree to provide adequate SIPP advice if they believe you have a pension provider that will permit you to invest in a SIPP, so it is imperative that you establish that you have a SIPP enabled pension and a highly experienced SIPP advice team to evaluate your likelihood of success. People who make a SIPP investment do so with all the associated risks fully explained to them by our experienced SIPP adviser.

Once again is it imperative that you seek a regulated company to provide you with your SIPP advice and who is authorised to provide SIPP advice before you decide to go ahead and invest your retirement fund - it is their legal obligation. The law is the law, and has to be adhered to – even by financial investment advisors.

We have established links with financial advisors authorised to offer SIPP advice that can provide you with all of the information necessary to maximise your chances of success. In partnership with several major financial companies, plus an investment company authorised to offer investment property through a SIPP, where required, we will also provide the highest quality of legal expertise available.

Turning your pension into a Sipp Pension.

Our goal is to provide you with access to professional SIPP advice that ultimately covers all the aspects of investing your pension by way of a Sipp Pension such that you receive the necessary SIPP advice to be certain that the investment is correct and right for you.

To find out more and if you qualify for a SIPP and to see if your existing pension is eligible to be invested in a SIPP, register your details below.

You’ll be able to discuss your needs with a FSA-regulated Independent Financial Advisor, and arrange for a fast and hassle-free pension-to-SIPP conversion.

The adviser will look at SIPP providers and identify the most suitable SIPP for you. There is no charge for the adviser to identify your SIPP requirements.

Sipp Rules

SIPP Rules.

Most type of pension schemes only accept cash however a SIPP can be used to include assets such as shares or commercial property. Virtually any type of pension can be transferred and used to set up a SIPP as the Rules allow this. It is common for what is deemed “Frozen Pension” i.e employee pensions that were set up through company schemes and who no longer work for that particular company and it is quite common for people to have had several of these if they have moved from job to job over a period of time. As they are “frozen” i.e no further contributions have been made since the employee left the company and depending on how long the person worked for the company there may be a pot of money in the pension that under SIPP Rules could potentially be transferred into a SIPP.

You may have also had pensions set up whilst in business or personal pensions these can also be transferred under SIPP rules and be used to setup a SIPP.

So under SIPP rules this is what happens. The asset is valued. It then automatically gets a 20% tax credit. Suppose the asset is £80,000 (and Sipps are intended for larger funds although you can start with £5,000), the taxman makes this up to £100,000. The extra £20,000 is in cash which can be turned into shares or other investments or kept in the bank account section of your Sipp.

When the person owning the Sipp then fills out their tax form at the end of the year, assuming that they are a higher rate taxpayer, they will then be able to claim a cash rebate equivalent to the difference between the 20 per cent credit already received into their fund and the 40% tax rate.

Because your £80,000 asset is the net amount, it has to be “grossed up” and, because of the wonder of percentages and Revenue maths, this gives a further £33,333 so you know have £133,333. It’s up to you how to use the extra £33,333

Once the SIPP is setup under the rules an Investor can make further ongoing contributions into the Sipp Pension and the rules allow full tax relief of up to 40% this means that if a 40% taxpayer contributed £100,000 then it may only cost him under the SIPP rules £60,000.

Also the SIPP rules allow for the possibility to increase the amount of funds available to the SIPP by borrowing up to a further half i.e 50% of the value of the SIPP, as an example if a SIPP has a fund of £250,000 under the rules it can borrow another £125,000 this will provide a total of £375,000 available to invest.

SIPP Benefits.

If you wish to contribute cash into the SIPP under SIPP Rules you can receive up to 40% tax relief

Under Sipp rules Property can be purchased using the Sipp fund

Rental Income is paid into the SIPP allowing the fund to grow

No Capital Gains Tax on Property Investments within a SIPP

Under SIPP Rules there are No tax liabilities when property is sold

No requirement for Cash Investment

SIPP Rules state that No Dividends can be taxed on Property Investments in a SIPP

Potential Inheritance Tax benefits may help to protect business assets

Pre agreed lending liability based on the property asset and NOT the individual

SIPP Rules allow Contributions into a SIPP are to the age of 75

Under SIPP Rules a syndicate can be set up so that two or more persons can pool their pension funds to invest, ideal for husband and wife/partner or group investment.

Virtually all types of pension can be invested into a SIPP

Provides a tax efficient way to invest for your retirement

As previously mentioned we strongly recommend that you take independent advice and with the links we have with experienced and qualified SIPP advisers you can be assured that your best interests will be looked after.

Turning your pension into a SIPP.

Our goal is to provide you with access to professional SIPP advice that ultimately covers all the aspects of investing your pension by way of a SIPP such that you receive the necessary SIPP advice to be certain that the investment is correct and right for you.

To find out more and if you qualify for a SIPP and to see if your existing pension is eligible to be invested in a SIPP, register your details below.

You’ll be able to discuss your needs with a FSA-regulated Independent Financial Advisor, and arrange for a fast and hassle-free pension-to-SIPP conversion.

The adviser will look at SIPP providers and identify the most suitable SIPP for you. There is no charge for the adviser to identify your SIPP requirements.