Ashton Hoyle Trustees Limited
The Ashton Hoyle SIPP
What is a SIPP?
As it’s name implies a Self
Invested Personal Pension (SIPP) is a personal
pension that provides a policyholder with an
opportunity to invest in a wide range of
investments.
The policyholder will normally be
appointed as a joint trustee along with the SIPP
provider.
Who is it for and how do they
work?
A SIPP is relevant for an
individual who wishes to take greater control over
the investment of their pension scheme and is
available to anyone who is under the age of 75 and
is either:
- employed
- self employed
- a pensioner
- a carer
- in full-time education
- unemployed
Just like SSASs, SIPPs have been
very popular since their inception and
remain ideally suited for Shareholding Directors of
small to medium sized limited companies and the
owners of partnerships. They are also very popular
for individuals approaching retirement with
reasonable pension fund values and looking to
benefit from unsecured pension benefits (USP) and
additional flexibility.
Contributions
For each tax year, it is possible
to get tax relief on any contributions paid by
either the member, or on their behalf, of up to the
higher of:
- £3,600 (the basic amount), and
- 100% of UK earnings (up to the Annual
Allowance of £255,000 for 2010/11 tax year)
If an individual does not have
any UK earnings, they can still contribute up to
£3,600 a year and receive basic rate tax relief. The
member only pays the net amount with tax relief
given at source.
An individual will receive tax
relief at their marginal rate of income tax on all
of their personal contributions (or any
contributions made on their behalf by a third party
[other than an employer]).
It is also possible to make a
contribution into a SIPP in the form of a commercial
property.
NB...it is very important that
you speak to an experienced financial adviser about
this option (if this is under consideration) due to
potential taxation issues that may arise.
NB...SIPP’s are ordinarily more
expensive than personal pension plans and tend to be
considered for more sizeable funds although this is
not a defining statement.
Benefits can be taken from age 55 and must be taken by age 75. If
death occurs before benefits are taken then the
whole of the fund can be paid to nominated
beneficiaries free of tax.
Protected Rights - At last, Investment choice for
your pension
All property transactions must be conducted on an
arm's length basis. Where the property is being
purchased, sold or let to the sponsoring employer,
member or other connected person, then the value of
the property and assessment of the rental value must
be confirmed by an independent chartered surveyor.
Tax benefits?
There are various tax benefits available.
Contributions paid by an
employer/business on behalf of any member of a SIPP
are made gross and should be
allowable as an expense of the employer/business
against corporation tax providing certain conditions
are met and procedures followed. Contributions made
by an individual are paid net of basic rate tax with
higher rate relief (where applicable) being claimed
via a self assessment tax return.
Investments usually accumulate
free of any income and capital gains tax, and
a percentage of each member's share of the fund can
be paid out as a tax free lump sum from age 55 without the need to actually
retire.
As a result of the new pension
rules brought in on 6 April 2006 (known as A-Day),
flexibility and control can now be maintained
indefinitely as pension income can be paid out of
the accumulated funds for the life of the
policy owner.
Interest payments arising within
the scheme, rental income and capital gains are all
free of tax.
NB...The dividend tax credit of
10% cannot be reclaimed however a higher rate tax
liability could exist.
Tax, death and other benefits, are very
important features that are provided within the
framework of a SIPP and form a major part of a
client's decision - please
contact us for further
details.
Annuity
If death occurs after the
purchase of an annuity, then any death benefits due
would be determined by any spouse's/financial
dependent's pension entitlements included at outset
along with any guarantee period remaining.
NB...As Alternatively Secured
Pension is a specialist area of financial advice,
then it is important that you speak to us about this
if it is something you are looking to consider as
you near age 75.
Summary
A SIPP is a flexible, tax
efficient way of saving for retirement and taking
benefits at retirement. The facility to hold a
diverse portfolio of different types of assets and
support businesses increases their appeal. However,
because of this they are heavily policed by the
Audit & Pensions Schemes Services of the Inland
Revenue.
This being the case it is
important to take specialist advice prior to making
any investment decisions otherwise the tax exempt
status of the scheme can be withdrawn which will
result in severe tax implications.
At Ashton Hoyle, we can provide you with the
specialist advice you need.
NB...The favourable tax treatment currently
available for SIPPs might not continue in the
future.
About Ashton Hoyle
Trustees Limited
The Personal Touch created!
The Ashton Hoyle SIPP offers you
(or your clients) the freedom & flexibility to do
more. We offer bespoke solutions, and abide by the
over-riding principle that "If Revenue and Customs
will allow it we will find a way to make it happen".
Ashton Hoyle Trustees Limited seek
to provide administration and technical support to
the highest standard for our clients and feel that
we achieve this through a unique blend of flexible,
personal and friendly service delivered to our
clients at a clearly understandable level. Ashton
Hoyle Trustees Limited don’t believe in call
centres. Every member of our team is equally
contactable and all are helpful, knowledgeable and
friendly which is why we’re proud to claim
‘expertise and accessibility
combined’.
Commercial property and SIPP's
“We are proud to make property
our business”, Ashton Hoyle Trustees Ltd
have been particularly successful in assisting
clients to purchase commercial
property to be held within their own SIPP. We have
developed efficient systems and built strong
relationships with banks, solicitors and surveyors
enabling us to provide a slick, smooth and
speedy process.
We take a complicated subject and
make it simple. All our staff without exception have
the skill set not only to comprehend and navigate
complicated in depth legislation but also to
communicate in every day language at all levels of
understanding.
Is any other self investment permissible?
Yes. The Trustees can invest in
shares of the members own company, however, must
acquire a valuation of the shares from the company
accountant/auditor is required in the first instance
to establish if it will work.
Summary
A SIPP is a flexible, tax efficient way of saving
for retirement and taking benefits at retirement.
The facility to hold a diverse portfolio of
different types of assets and support businesses
increases their appeal. However, because of
this they are heavily policed by the Audit &
Pensions Schemes Services of the Inland Revenue.
This being the case it is important to take
specialist advice prior to making any investment
decisions otherwise the tax exempt status of the
scheme can be withdrawn which will result in severe
tax implications.
At Ashton Hoyle, we can provide you with the
specialist advice you need. To find out more, please
contact us.
NB...The favourable tax treatment currently
available for SIPPs might not continue in the
future. |
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