A Self Invested Personal Pension (SIPP) is designed to allow personal management of a pension fund by providing the investor with the freedom to control and change the investment at any time.

What is a SIPP?

A Self Invested Personal Pension (SIPP) is a Registered Pension Scheme for the purposes of Section 150 of the Finance Act 2004. It is a product regulated by the Financial Services Authority (FSA).

A SIPP provides a choice from a range of assets, including certain types of real estate. This is different from a standard personal pension scheme where the investments are managed within the pooled fund that the contributor has chosen.

Can a SIPP be used to purchase land in the Cayman Islands?

A SIPP can be used to purchase land in the Cayman Islands. It presents a tax-efficient way to acquire land rather than using personal savings. An Independent Financial Advisor can provide information regarding eligibility and whether this would compliment the financial circumstances of each client.

What are the advantages?

A SIPP permits a far greater degree of control and flexibility in the type of investment that can be made compared with a traditional pension plan.

There is the possibility of utilising ‘frozen’ pensions from previous employment or businesses. Personal pensions can also be transferred.

There has been an increase in negative media coverage of the UK’s pension deficit, arising from ill-advised investments in volatile stock markets. However, a SIPP pension transfer gives clients the opportunity to transfer away from inherent risks and into a fund that benefits directly from a broad range of actively managed international investments.

Inheritable Asset

In the event of the pension holder dying before taking any retirement benefits, in most cases 100% of the SIPP fund can be paid as a cash sum to a pre-nominated individual.

Income Tax Incentive

There are significant tax benefits by saving in a SIPP. The government contributes 20% of the gross paid by the individual.

For those paying a higher tax rate the benefits could amount to an additional 20%

Capital Gains Tax

Capital Gains on investments within a SIPP is exempt from tax.

Borrowing

It is possible to borrow up to 50% of the value of a SIPP.

Who Qualifies for a SIPP or Pension Transfer?

Any type of UK private pension can be transferred into a SIPP. The following categories of United Kingdom Citizens under the age of 75 are eligible:

• Self Employed
  
• Non-working spouses
• UK residents living overseas