A sipp is a self invested personal pension plan. A personal pension plan which puts you in control, giving you greater investment flexibility. You can choose where, when and how (subject to Inland Revenue regulations), your money is invested. So you get the chance to get involved and take control.
If you are eligible for the plan, both you and your employer can invest in a sipp. Alternatively, if you have accumulated pension benefits in another arrangement, you can often transfer them into a sipp, although you should take professional advice on whether this is advantageous for you.
As a tax-approved pension scheme, the plan attracts valuable tax benefits:
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The ability to invest in commercial property and other permitted investments.
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Full tax relief on personal contributions (within limits)
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No tax to pay on contributions by your employer
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Investments grow free of capital gains tax
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Your fund is exempt from UK income tax and capital gains tax. However the underlying investments within your fund may be subject to taxation. Since July 1997 pension funds have been unable to recover tax deducted at source on dividends from UK equities.
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Tax free cash on retirement, normally
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On death before drawing benefits, the fund can normally be paid to beneficiaries free of tax
Benefits can be taken from the plan between the ages of 50 and 75, or in certain professions at an earlier date. You can draw a tax free lump sum (usually 25% of the fund) and buy a pension annuity with the rest of your fund. Alternatively, an "income drawdown" facility allows you to leave the fund invested and just draw an income from it, within limits. Note: The tax reliefs referred to in this website are those available under current legislation, which may change, and their availability and value depend on individual circumstances. For more information, please contact us on 0191 488 8445 |
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