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HMRC rules ‘block P2P Sipp investments’


Sipp providers have warned that HMRC rules are preventing them from allowing customers to invest in peer-to-peer lending.

In April, P2P platform Ratesetter signed distribution deals with Sipp firms London & Colonial and European Pensions Management. But other providers say HMRC rules designed to stop members of the same pension schemes from lending to each other could see savers hit by unauthorised payment charges.

AJ Bell head of technical services Gareth James says: “With HMRC’s connected party rules, you could be treated for breaching rules if the people lending to each other are holding a Sipp under the same registered pension scheme. It’s potentially a very widely applicable rule and, when you’ve got Sipp firms with tens of thousands of customers all in the same registered scheme, it’s a risk you can’t control.”

Dentons director of technical services Martin Tilley says: “It is not sufficient to say we are holding an investment in a P2P provider; you have to know where the underlying investment is. How can you possibly know where the money is ending up?

“It’s like investing in a DFM – they need to tell you whether they are investing in regulated or unregulated assets. P2P does not fit into Sipps at the current time.”

But European Pensions Management commercial director Mark Hayes-Newington says there is not a problem with either segregated or pooled loans. However, he adds the firm is lobbying the tax office to produce clearer guidelines.

An HMRC spokesman says: “The pensions tax rules do not set out what a pension scheme may or may not invest in but set out the tax consequences of any investment. Whether a P2P loan would be an authorised payment will depend on the circumstances.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. Surely the big problem with “pooled loans” is that they’ll most likely be a UCIS?

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