Pointon York Sipp Solutions is to allow in specie comm-ercial property transfers into its Sipp.
In May, HM Revenue & Customs said that in specie contributions were not permitted by legislation unless investors made a legally enforceable promise to pay a certain level of contribution into the Sipp. As a result, many providers disallowed in specie contributions due to practical and legal concerns, in particular, on how to determine value of assets for contribution purposes.
PYSS has resolved this by telling investors that they must sign an “irrevocable, legally enforceable document” under which investors must agree to pay a certain amount into their Sipp before transferring the property into the pension.
If the market value of the property which is transferred to the Sipp proves to be less than the monetary amount which the investor previ-ously agreed to contribute, the investor will be liable to make up the shortfall in cash.
Technical manager Michael Smith says: “For us, property is the main asset we wanted to allow people to contribute into their Sipp.”
But Rowanmoor director David Seaton says: “We have never had an issue with in specie contributions. I think there are a number of providers who do not offer more esoteric investments simply because they are complic-ated and costly to do.”