Under current legislation, contributions to a registered pension scheme, such as The Pointon York SIPP, must be made as a monetary amount.
HM Revenue & Customs (HMRC) guidance confirms that such contributions may be by cash, cheque, direct debit or bank transfers. A simple transfer of property to your SIPP (known as an “in-specie” contribution) is not permitted per se.
The exception in the legislation is shares maturing from an approved Share Incentive Plan (SIP) or SAYE scheme – these shares can be assigned as a contribution within 90 days of maturity.
However, there is a way you can legitimately make an “in-specie” contribution of assets other than SIP / SAYE shares provided it is made in settlement of a legally enforceable promise to pay a certain level of monetary contribution to the SIPP.
In other words, if you promise to make a certain contribution (expressed in £s), and this promise is legally binding on you, then HMRC rules allow you to assign personal assets over to your SIPP in lieu of the cash contribution due and treat this as a tax relievable contribution.
There is a prescribed process that needs to be followed, and we have standard documentation that needs to be signed. Our 'In-specie' Contributions Fact Sheet explains more.
We will allow commercial property to be contributed this way in stages over a number of tax years. However, as there will be a period of joint ownership, we have certain conditions that will need to be met (joint ownership agreement, management controls, isolation from any existing mortgage etc).
If you have any queries, please contact our Business Development Team on 01858 419300.