SIPP restrictions
There are some restrictions designed solely to prevent abuse of the Self-Invested Personal Pension (SIPP). Any SIPP holding prohibited assets directly or indirectly will have all tax advantages removed, which will broadly mean that it is at least no more advantageous to hold such assets in a pension scheme than it is to hold them personally.
Prohibited assets include direct or indirect investment in residential property, as well as certain other assets such as fine wines, classic cars and art & antiques. Direct investment is direct ownership of an investment. Indirect investment means the SIPP has ownership through another company or investment such as a unit trust.
If a SIPP directly or indirectly purchases a prohibited asset the purchase will be subject to an "unauthorised member payments charge". This will recoup all tax relief given on the amounts used to purchase the asset. This means the Inland Revenue will demand you pay back the tax relief that has been given to your fund in respect of your pension contributions. Sometimes it's best to get advice about SIPPs before you get too far into the process
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