Standard Life has written to HM Revenue & Customs asking for confirmation that the Government will not perform another Self Invested Personal Pension U-turn and block tax breaks for private companies investing in their own businesses. Directors of limited companies with Small Self Administered Pension Scheme’s (SSAS) can switch their assets into a Self Invested Personal Pension (SIPP) to take advantage of their more relaxed investment regime. Up to 100% of SIPP shares can be held in unquoted shares, compared with just 5% of SSAS assets.
This enables directors to carry out a new share issue to finance the business or use the funds in a SIPP to help finance a management buyout.
Our view
The flexibility is extremely good and many business owners will look to take advantage of the same. As ever, HM Revenue and Customs may weigh up the potential mass abuse of such flexibility and decide whether to withdraw the facility.
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