A Considerate SIPP Provider

A Considerate SIPP Provider Since the regulation of self invested personal pensions (SIPPs) in April 2007, around 150 SIPP providers have obtained authorisation from the Financial Services Authority to operate a SIPP product. Since April, several publications have highlighted that many of the products offered as SIPPs are in fact beefed-up personal pensions offering no more than access to a platform of fund managers and collective investments. Indeed, with the UK stock markets having retreated from six year highs and uncertainty in other global markets, coupled with UK commercial property prices also looking expensive, many investors are looking to SIPPs to offer alternative investment avenues with the potential for future gain. Dentons SIPP, being one of the few SIPPs on the market, with full investment and contribution functionality, will consider the more esoteric investments that many other SIPP providers cannot, or will not entertain. Such opportunities include both unquoted funds and shares as well as overseas property. However, in respect of the latter, price reductions in Spanish and US properties are also reported, so investors may be looking elsewhere. Whilst residential property is still unavailable to SIPPs, other than through specialist collective vehicles, Dentons are currently working with commercial property developers on top-end market hotel accommodation in Himmapan, Thailand, and Caicos Beach in Turks and Caicos. Hotel accommodation is regarded as commercial and is acceptable to HMRC, provided it satisfies the following criteria:- No privileged occupational rights can be made available, either at the hotel or at any other facility, to any individual connected to the SIPP as a result of the investment. The accommodation must not be capable of long-term residential occupation. In respect of the latter, it is usual that the room / suite will not have full kitchen or laundry facilities and in some circumstances may have extremely limited wardrobe space. It is also usual for the hotel to be designated as being on commercial land. Individual villas that are not part of a hotel complex cannot satisfy these criteria. The two investment opportunities mentioned above are effectively off-plan or at initial stage of development with reputable developers, offering a chance to buy into the property at substantially discounted rates. On completion the property unit is leased back to the hotel management group for a share in the rental yield. Gearing may also be available and it is usual for a secondary market to exist should clients wish to realise their investments. Whilst Dentons cannot advise as to whether investments such as these are suitable for the particular circumstances of individual SIPP clients, they can confirm whether or not the planned investment is one that is approved for use within SIPPs. Dentons have also structured their SIPP such that the member is appointed co-Trustee of their plan to sit alongside the Dentons trustee company. We believe that this provides the member with a greater feeling of control and ownership that some other products in the marketplace do not offer. The member can, therefore, be actively involved in the buying process, the selection of professionals to assist in the purchase and the management of the property once owned. Dentons will, however, insist upon good title to the property and a correct legal process to protect the interests of the beneficiary. Martin Tilley is a Pension Consultant & Business Development Manager at Dentons Pension Management Limited. He can be contacted at Martin.tilley@dentonspensions.co.uk or 01483 521521. Visit our website at http://www.dentonspensions.co.uk Dentons Pension Management Limited is Authorised and Regulated by the Financial Services Authority.