Financial Advisers

Click here to see how our Bespoke SIPP can benefit you and your clients

ABOUT THE SIPPCHOICE BESPOKE SIPP

The Sippchoice Bespoke SIPP has been developed for:

  • financial advisers who wish to offer their clients a fully-featured and flexible SIPP; and
  • individuals who are looking to be in control of their pension fund; and
  • financial advisers and individuals who require an efficient and personal administration service.

We have outlined below some Questions and Answers that will provide you with much of the information that you will want to know about the Sippchoice Bespoke SIPP.  If you have any queries, or require any further information, then please don’t hesitate to phone us on  01483 521 521 or you can email us at any time at  info@dentonspensions.co.uk

Please click on the question below to see the answer or click here to see the answers to all the questions.

What is the structure of the Sippchoice Bespoke SIPP?

Dentons Pension Management Limited is the Provider and Administrator of the Sippchoice Bespoke SIPP.  In order to keep the SIPP's assets separate from those of Dentons, all the SIPP's assets are held by a separate trustee company, Sippchoice Trustees Limited.

A separate bank account is set up with Cater Allen Private Bank for each member.  Details of the interest, if any, which is credited to these accounts are shown on the Interest Rates Guide on the Literature Page of our website.

 

This account is the central transaction account for your SIPP, i.e. all your SIPP's transactions must go through this account and, whilst it may be a convenient account for holding cash, it is not intended as an investment for your SIPP.

There is no requirement for cash balances to be maintained in this account and cash can be transferred to an additional deposit account of your choice – there is a small charge for opening/closing such an account – see the Fees Schedule on the Literature Page of our website for details of this charge.

Who manages the investments in my SIPP?

Your financial adviser or fund manager can manage your SIPP's investments. Alternatively, you can choose to manage the investments yourself.

What investments can be made in my SIPP?

There are no HMRC restrictions on the investments that can be made in a SIPP (although certain investments will be treated as unauthorised payments and be subject to high tax charges) and your SIPP can invest in a wide range of investments.  However, we reserve the right to decide which investments can be held in your SIPP and not to proceed with investments that do not satisfy our due diligence procedures or any other requirements that we may specify.  Furthermore, we will not accept any responsibility for the performance or liquidity of any investments that we do allow to be held in your SIPP.

The following investments can normally be held in your SIPP:

Standard investments

Standard investments are listed below subject to the investment being capable of being accurately and fairly valued on an ongoing basis, readily realised whenever required (up to a maximum of 30 days) and for an amount that can be reconciled with the previous valuation:

  • cash, cash funds and deposits
  • exchange traded commodities
  • government & local authority bonds and other fixed interest stocks
  • investment notes (structured products)
  • shares in investment trusts
  • managed pension funds
  • National Savings and Investment products
  • permanent interest bearing shares (PIBs)
  • physical gold bullion
  • real estate investment trusts (REITs)
  • securities admitted to trading on a regulated venue, i.e. an exchange (e.g. a stock exchange or trading venue, such as a multilateral trading facility) that is authorised by a financial regulator or government agency; it is not restricted to the EEA
  • UK commercial property (except where (i) the property transfer cannot be registered at the Land Registry or (ii) it would take more than 30 days to transfer the property)
  • units in regulated collective investment schemes.

Non-standard investments

Non-standard investments are investments that are not covered by the definition of ‘standard investments’ and the following non-standard investments can be held in your SIPP subject to our agreement following completion of the due diligence procedures set out below:

  • unquoted UK companies (excluding seed capital)
  • unregulated collective investment schemes (UCIS)
  • UK commercial properties that are not standard investments
  • direct investment in ‘taxable property’ (see below)
  • indirect investment in ‘taxable property’ (unless this is done using a vehicle that meets certain conditions)
  • loans to members and/or connected persons (but loans to third parties may be permitted if they meet certain conditions)
  • any investment that is made in order to facilitate early access to a member’s pension fund (‘pensions liberation’) or any direct or indirect payments or benefits to members and/or connected persons.

Due diligence on non-standard investments

In order to satisfy our regulatory responsibilities, we will carry out due diligence on non-standard investments before making a decision on whether they can be held in your SIPP and also check that you are fully aware of the risks involved and any potential difficulties in selling these investments.  In compliance with FCA requirements, our due diligence procedures for non-standard investments cover, among other things, the following ey areas:

  • correctly establishing and understanding the nature of an investment
  • ensuring that an investment is genuine and not a scam, or linked to fraudulent activity, money-laundering or pensions liberation
  • ensuring that an investment is safe/secure (meaning that custody of assets is through a reputable arrangement, and any contractual agreements are correctly drawn-up and legally enforceable) 
  • ensuring that an investment can be independently valued, both at point of purchase and subsequently, and 
  • ensuring that an investment is not impaired (for example that previous investors have received income if expected, or that any investment providers are creditworthy etc.) 

Investments that cannot be held in your SIPP

We will not normally allow the following types of investment to be made in your SIPP because they will be treated as unauthorised payments and be subject to tax charges:

  • direct or indirect investment in ‘taxable property’ (see below)
  • loans to members and/or connected persons (but secured loans to UK companies may be permitted)
  • any investment that is made in order to facilitate early access to a member’s pension fund (‘pensions liberation’) or any direct or indirect payments or benefits to members and/or connected persons.

'Taxable property' is:

  • residential property, including residential ground rents; or
  • tangible moveable property (i.e. anything that you can touch and can be moved, e.g. antiques, boats, cars, jewellery, wine and works of art, etc.).

We will not normally allow the following investments to be held in your SIPP:

  • carbon credits
  • contracts for difference or spread betting
  • currency trading accounts
  • intellectual property and copyrights
  • land banking
  • life settlement funds
  • litigation funding
  • loans that are made to acquire residential property or any other ‘taxable property’
  • overseas property/land of any type
  • peer-to-peer lending
  • seed capital
  • traded endowment policies
  • unquoted overseas companies.

 

Can my SIPP borrow?

Yes.  Your SIPP can borrow up to the maximum permitted by HM Revenue & Customs, i.e. 50% of the SIPP's net value, for investment in commercial property or, indeed, for any other investment purpose.

Can I buy investments from, or sell investments to, my SIPP?

Yes.  You (and anyone connected with you) can buy investments from, or sell investments to, your SIPP - these transactions must take place on an arm's length basis and be on commercial terms.

Where is my SIPP's cash deposited?

A separate bank account is set up with Cater Allen Private Bank for each member. Details of the interest, if any that is credited to these accounts are shown on the Interest Rates Guide on the Literature Page of our website.

This account is intended to be the central transaction account for your SIPP, i.e. all your SIPP's transactions must go through this account and, whilst it may be a convenient account for holding cash, it is not intended as an investment for your SIPP.

There is no requirement for cash balances to be maintained in this account and cash can be transferred to another deposit account of your choice – there is a small charge for opening/closing such an account – see the Fees Schedule on the Literature Page of our website for details of this charge.
 

Are there any restrictions on the contributions that can be paid to my SIPP?

There is no minimum contribution requirement for your SIPP.  Also, there are no restrictions on how much you can contribute to your SIPP, although there are complex restrictions on the contributions that qualify for tax relief.

When is the tax deducted from my personal contributions repaid?

Your personal contributions to your SIPP are paid net of basic rate income tax and we will reclaim this tax from HM Revenue & Customs.  However, it can take 7 to 11 weeks for us to receive the tax reclaim

Are there any restrictions on transfer payments to my SIPP?

Your SIPP can accept transfer payments from other registered pension schemes.  These can be in cash or as an in-specie transfer of investments from the transferring scheme.

When can I take benefits from my SIPP?

You can normally take benefits from your SIPP at any time from the age of 55.  You do not need to retire from work in order to take benefits.

Can I take any of my benefits as tax-free cash?

Yes.  You can usually take part of your pension fund as a tax-free lump sum (normally, up to 25% of the value of the pension fund, or 25% of the prevailing Lifetime Allowance, if less).  This would usually be paid as cash but it may be possible for it to be paid wholly or partly as an in-specie transfer of investments from your pension fund.

How much income can I take from my SIPP?

The remaining balance in your pension fund after the payment of the tax-free lump sum must be used to provide income payments that are subject to income tax, in one, or a combination, of the following ways:

  • phased drawdown
  • flexi-access drawdown
  • capped drawdown (this is only available if it was in place before 6 April 2015)
  • a lifetime annuity, in which case the amount of the annuity will depend on your age, state of health, fund value, annuity rates and the benefit options you choose.

What is ‘phased drawdown’ and how does it work?

You can crystallise all, or just part, of your SIPP fund, which allows flexibility as to how and when you can take benefits.  If you crystallise only part of your SIPP fund then your SIPP fund will be notionally split into two distinct components:

  • the ‘crystallised’ component; and
  • the ‘uncrystallised’ component.

How does ‘flexi-access drawdown’ work?

Flexi-access drawdown is available to anyone who has attained age 55 (or earlier in cases of serious ill-health or if you have a protected pension age).   

Under flexi-access drawdown you can withdraw one-off income payments of any amount whenever you wish subject to income tax under PAYE.

If you have taken any income under flexi-access drawdown then pension contributions of up to the ‘Money Purchase Annual Allowance’ (£4,000 for the 2017/18 tax year) ) can be paid by, or for, you to your SIPP (and to any other defined contribution schemes) in any tax year without being subject to the Annual Allowance Charge.  Contributions in excess of this will be subject to the Annual Allowance Charge.  Also, the carry forward facility is not available if you have taken any income under flexi-access drawdown.

How does ‘capped drawdown’ work?

The maximum income that you can withdraw under ‘capped drawdown’ is 150% of the annuity that your crystallised SIPP fund can provide based on annuity rates published by the Government Actuary’s Department.  This will have been calculated when you commenced drawdown and it will usually be recalculated every three years thereafter until you attain age 75, when it must be recalculated annually.  If you are under age 75 then you can ask us to recalculate your maximum income on any anniversary of your drawdown date, in which case the new figure will apply for three years from that date, unless you again request an earlier recalculation.

You can vary the amount of income that you take each year as long as it does not exceed the maximum income.  There is no minimum income that you must take, so you do not have to draw any income.  However, it is not possible to carry forward any undrawn amounts to another drawdown year.

Note: Capped drawdown is only available if it was in place before 6 April 2015

What online facilities are available in relation to my SIPP?

You will have secure online access to details of your SIPP's investments, including the most recent valuations held in our records and the previous night's balance in your SIPP bank account.

Who will administer my SIPP?

Your SIPP will be administered by a dedicated team of experienced administrators, details of whom will be given to you.  This team will be responsible for looking after all aspects of your SIPP.

Will I have to go though a call centre if I telephone you?

Definitely not.  We dislike call centres, so we will give you the direct phone number for the administration team that looks after your SIPP.  When you call us you will speak directly to a member of that team or, in their absence, to one of their colleagues.

What are the fees for my SIPP?

The fees for the Sippchoice Bespoke SIPP are clear and transparent.  Full details of our fees are set out in the Fees Schedule on the  Literature Page  of this website.


Dentons Pension Management Limited is authorised and regulated by the Financial Conduct Authority under reference 461094