What is a SIPP?
A Self-Invested Personal Pension (SIPP) is a personal pension scheme set up under a master trust. The SIPP is registered with HMRC and governed by a trust deed and rules.
A SIPP is primarily set up for an individual to allow them to save for retirement flexibly and tax-efficiently. The SIPP can offer access to a wide range of investments which means that you (normally with guidance from your financial adviser, if appropriate) have considerable control and flexibility over the assets and the investment strategy, in order to provide for your retirement.
Why choose a SIPP?
A SIPP provides a tax-efficient environment in which to build up funds to provide retirement benefits.
A SIPP gives you as the member the opportunity to make your pension work harder prior to retirement by giving you control over your investments. Unlike some other pension schemes, it allows you (and your financial adviser) the flexibility to choose and manage the underlying assets.
In addition to being a tax-efficient fund, you also have the flexibility to choose when and how you take your benefits.
Why is a SIPP tax efficient?
You can make payments into your SIPP in a tax-efficient way to provide benefits in your retirement.
Personal contributions normally benefit from UK Income Tax relief and contributions made by your employer normally qualify for Corporation Tax relief in the year in which they are made.
Investments are generally exempt from UK Income Tax and Capital Gains Tax (CGT).
On retirement, a tax-free lump sum of typically 25% of the fund can be taken.
There is no Inheritance Tax (IHT) on pension scheme funds.
Before age 75, irrespective of whether you have drawn benefits or not, the entire remaining fund may be paid free of tax to your nominated beneficiaries as a lump sum or income.
Upon death after age 75, payments to a nominated beneficiary will be subject to income tax at the beneficiary’s marginal rate.
Please note that the value of investments and any income from them can go down as well as up, and you may not get back your original investment. We do not offer advice about the suitability of our products or any investment held within them. Should you require financial advice, please consult with an authorised financial adviser.
For more information about the ARC SIPP, please call us on 0161 940 9000.