Tax dodge of the week: Buy unquoted shares for your Sipp

By Contributing editor Emily Hohler Mar 23, 2006

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A surprise U-turn by Gordon Brown means you will not be able to stuff your self-invested personal pension (Sipp) with residential property or fine wine. But the chancellor has not been a total party-pooper.

You can still hold unquoted shares in a Sipp from 6 April, says Josephine Combo in the Financial Times. At the moment, you can only hold unquoted shares in a pension if you have an employer-sponsored, small self-administered scheme (SSAS) – and the number of shares is strictly limited.

However, all this will change in a few months, when private companies will get tax breaks of up to 40% to buy capital in their own firm. So, if you need to inject some capital into the business, you could issue some shares for the Sipp to buy.

Of course, it’s not a good idea to pour 100% of your Sipp into risky, unlisted shares. You might also have some trouble finding a genial Sipp provider, because of problems with accurate valuations. But at least the chancellor hasn’t noticed – yet.

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Published in Personal finance | More articles by Emily Hohler

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