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Guide to Sipps

    CPD
    Approx.60min
    Guide to Sipps

    Introduction

    Ultimately a Sipp is a personal pension where investors choose to make their own investment decisions.

    In recent years the Sipp market has evolved into two distinct parts: the platform market, providing investors with more standard investment choices centred around collectives, and the independent market, mostly made up of the original bespoke providers that offer open access to a much wider investment market and assets not normally available through a platform.

    HM Revenue and Customs does not provide a list of allowable investments, but deems certain types of asset, such as residential property or vintage cars, as taxable property therefore making them unattractive for investment within a pension.

    As a result of this treatment from HMRC, the majority of Sipp providers will not permit investments that risk being defined as taxable property.

    A Sipp can also borrow up to 50 per cent of its net value in order to invest further, most commonly when the investor is purchasing a commercial property as this gives a lender some security for their loan.

    This guide will explore recent rule changes for Sipps, detail what advisers need to consider when contemplating a transfer to this vehicle and explain some of the regulator’s concerns about this product.

    Contributors of content to this guide are Charlene Edwards, technical services consultant at AJ Bell; Paul Evans, pensions technical manager of Suffolk Life; Chris Marshall, senior technical specialist at Hornbuckle and Matthew Rankine, director of sales and marketing at Liberty Sipp.

    In this guide

    CPD
    Approx.60min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. How many categories does Mr Rankine reckon the capital adequacy requirements split the Sipp industry split into?

    2. What does Mr Marshall say about the cost of Sipp contracts as a whole?

    3. When did the FCA pen its latest Dear CEO letter to all Sipp operators?

    4. Which comparison tool does Mr Rankine not recommend?

    5. Who does Mr Evans say a flat Sipp fee is unlikely to be unsuitable for?

    6. Pre-April 2015, what does Mr Evans believe the primary motivations for transferring to a Sipp was?

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