Tuesday, May 26, 2020

Just What Assets Can You Hold In A Pension?

Must read

Struggling Forex Broker Bought Flats With Company Funds

A forex broker whose company was approaching financial meltdown switched £1.05 million from a business account to buy two apartments in Dubai in a...

Stock Markets Slump To Worst Quarter In 37 Years

Stock markets slumped to record losses in the first three mnths of the year due to fears over how coronavirus impacts the world economy...

Operation Airlift Underway For Brits Stranded Abroad

The British government is working with partner airlines to bring thousands of stranded travellers back to the UK. Foreign Secretary Dominic Raab has set aside...

Expat Landlords Get Buy To Let Mortgage Aid

The financial pain of coronavirus uncertainty for buy to let landlords has been eased by the housing minister. Secretary for Housing Robert Jenrick is extending...

Financial advisers often talk about the wide range of investments retirement savers can hold in a SIPP without explaining just what these investments are.

So, here’s a list of allowable pension investments from HM Revenue and Customs.

These are investments that can be held in a SIPP without triggering an ‘unauthorised asset’ penalty.

Holding moveable assets in a pension automatically triggers a penalty. Moveable assets include fine are, wine, residential property, cars, helicopters and yachts.

The exception is a small amount of gold – which is explained below.

Stocks and shares:

  • Securities but not derivatives listed on the London Stock Exchange, London Alternative Investment Market (AIM) or any other overseas exchange recognised by HMRC
  • UK Treasury bills
  • Unlisted securities, provided the parties involved are not connected to the investor
  • Depositary interests listed on the London Stock Exchange, London Alternative Investment Market (AIM) or any other overseas exchange recognised by HMRC

Derivatives

  • Any futures, options, warrants or other derivatives where the contract liability is less than the amount invested in the contract

Collective investment schemes

  • Exchange traded funds and commodities, tax exempt unauthroised unit trusts, OIECS
  • Close-ended collectives, investment companies, trusts and REITS listed on the London Stock Exchange, London Alternative Investment Market (AIM) or any other overseas exchange recognised by HMRC

Partnerships

  • Limited liability partnerships

Structured products

  • Only if the underlying investment is an European Economic Area (EEA) deposit account or another asset allowed as an authorised asset

National Savings

  • Any National Savings & Investment product that a corporate trustee is cleared to hold

Bank accounts

  • Most accounts with EEA authorised deposit takers

Property

  • Commercial property only

Loans

  • Loans to connected parties, limited companies and limited liability partnerships

Gold

  • Investment grade gold as a bar or wafer that is professionally stored with a purity of no less than 995/1000

HMRC says tax rules don’t restrict what a scheme can invest in but if certain conditions aren’t met there may be tax charges on the investment.

However, the income and gains from investments in most pensions are not taxed.

Full details of HMRC’s guidance on pension investments are outlined in the Pensions Tax Manual, which offers technical advice to HMRC staff.

- Advertisement -

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest article

Struggling Forex Broker Bought Flats With Company Funds

A forex broker whose company was approaching financial meltdown switched £1.05 million from a business account to buy two apartments in Dubai in a...

Stock Markets Slump To Worst Quarter In 37 Years

Stock markets slumped to record losses in the first three mnths of the year due to fears over how coronavirus impacts the world economy...

Operation Airlift Underway For Brits Stranded Abroad

The British government is working with partner airlines to bring thousands of stranded travellers back to the UK. Foreign Secretary Dominic Raab has set aside...

Expat Landlords Get Buy To Let Mortgage Aid

The financial pain of coronavirus uncertainty for buy to let landlords has been eased by the housing minister. Secretary for Housing Robert Jenrick is extending...

Financial Package On The Way For Self-Employed

Financial support is coming for freelance and self-employed expats who pay their taxes in the UK, Prime Minister Boris Johnson has promised. In his last...