In principle, a SIPP may invest in unquoted shares, subject to certain restrictions and conditions. However, there are two main considerations that need to be considered:
- Will the investment be viewed as an indirect investment in ‘Taxable property’ under the new tax rules
- The valuation of the shares being acquired by the SIPP
The general risks of unquoted share investments (i.e. high risk and illiquid) also need to be considered.
Booklet and Application Form
The two main issues - Taxable Property and Valuation - are discussed more below. However, we have produced a separate booklet 'Investing in Unquoted Shares under The Pointon York SIPP' which explains the above considerations in more detail and also outlines our conditions and charges.
Because of the above issues / risks we will not allow a member to invest more than 50% of their SIPP funds in unquoted shares.
If you are interested in buying unquoted shares through The PY SIPP please contact us.
Taxable property
Acquisition of unquoted shares through a SIPP can bring with it unexpected, and perhaps to most people illogical, tax charges.
If the shares are being purchased in a company that is not what HM Revenue & Customs (HMRC) calls a 'Genuinely diverse commercial vehicle' (GDCV) there are likely to be tax consequences, for both the member and their SIPP, if the SIPP purchases shares in that company.
Valuation
Where shares are being acquired from you or a person / company connected to you, or are in a company connected to you, we require an independent valuation to be provided to support the price being paid as a 'market value'.