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Hay to allow wind turbines in Sipps despite lack of tax clarity

James Hay and IPS Partnership says it will accept wind turbines into a Sipp despite HM Revenue & Customs guidelines remaining unclear on whether they would be classed as “moveable property”.

Under HMRC rules, a Sipp which invests in “tangible, moveable property” is subject to an initial tax charge of 40 per cent, negating the tax relief incentive offered to a Sipp. Concerns have been raised over a number of “grey areas” in the legislation which could prevent pension funds investing in wind farms if they are deemed to be non-permanent.

However, James Hay and IPS Partnership business development director Richard Mattison says the firm would allow such an investment into a Sipp.

He says: “In our opinion, a wind turbine is commercial property. You own the plot of land that it sits on and when the turbine is installed, it becomes part of the land. A wind turbine is not tangible, moveable property because you cannot take it away – it is plugged in and built and that is where it sits.”

Hornbuckle Stewart has written to both the pensions and climate change ministers requesting an exemption in the current rules for investments in both wind turbines and solar panels.

Marketing director Mary Stewart says: “Our interpretation of the rules as they stand is it would be risky for an investor to put a wind turbine into a Sipp because if HMRC decide they will class it as taxable property, then there is a tax charge to the scheme.”

While guidelines state that judgement of whether an item is moveable is based on if the plant and machinery is integral to the property and can be removed without damaging the property, HMRC is understood to be quoting case law and says it would also look at the reason the item was fixed. If the asset was fixed to allow its use and does not enhance the property, HMRC is likely to treat it as tangible, moveable property.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. “Hornbuckle Stewart has written to both the pensions and climate change ministers requesting an exemption in the current rules for investments in both wind turbines and solar panels.

    Director Mary Stewart says:…”

    Has Mary ousted the Mitchells??

  2. I disagree with James Hay’s view here. My parents used to own a small holding. They had a turbine on their land which produced a modest income.

    Prior to selling the land for development, they sold the turbine. A specialist firm came and removed it. So it was either moveable or it has since been hid,den with a Harry Potter-esque invisibility cloak!

  3. I work in the SIPP & SSAS industry and I agree with James Hay here – surely a 100 foot high wind turbine cannot be “moved” any more than a Commercial building could be moved?. Yes, HMRC rules contain “grey areas” and it is frustrating that the rules are not written in plain English. Perhaps Hornbuckle (Mitchell) have had a ticking off by HMRC on other issues and are taking a cautious stance on such matters?

  4. He says: “…A wind turbine is not tangible, moveable property because you cannot take it away – it is plugged in and built and that is where it sits.”

    You most certainly can take it away – there is a thriving market for second hand wind turbines of all sizes.

    Plus, HMRC specifically list wind turbines as examples of plant & machinery in their Capital Allowances Manual – see CA23084

    Caveat Emptor…

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