Making a loan out of my SIPP

Sippqs81

Hello all,

I have a question regarding my SIPP and the rules surrounding the loans to unconnected third parties.

I already have an IFA who has put me into SippCentre. They are very good and I am very happy with their share dealing service. However, I am keen to lend money to a new business at a good rate of interest.

SippCentre, according to my IFA, will not allow me to lend any % of my SIPP value out of the fund.

I did a quick Google on the subject and came across a SIPP provider that would allow me to loan out 50% of the fund. I called them and they explained that the cost of organising this deal would be approximately £1,000, which would pay for the charge/security against the assets of the 'loanee'. Unfortunately, in relation to only 50% of the SIPP, £1,000 is too much and makes the whole deal
not worthwhile.

I want to ask if there are any SIPP trustees that allow a SIPP under their management to loan out 100% of the fund to an unconnected third party? Against the whole fund, paying £1,000 would be worthwhile.

I would really appreciate any suggestions.

Many thanks.

Vincenzo

I cannot imagine this would be allowed under pension rules. Not my area of expertise but I will be interested to hear more if this is possible.

bendix

Utterly impossible. Can't be done.

Cautious_Investor_3

Hi

I believe that you can do this, however this is a rather specialist area where there are I believe some strict criteria, for example the loan cannot be to a conntected party, would probably have to be secured as a first charge and interest would have to be chargeable at a market rate.

I really doubt you would get a SIPP provider to do this (if they will entertain it at all) for less than the £1,000.

Try one of the smaller SIPP providers such as Talbot & Muir, AJ Bell or Mattioli Woods.

I hope this helps.

The Cautious Investor

Sippqs81

Thanks for the messages so far.

I am not allowed the post the relevant link I found, into this forum. However, MW Pensions dot co dot uk have a good pdf article which is relevant, entitled "Lending by a SIPP or SSAS".

I called MW and they stated that rules allow up to 100% loan, but they did not know of any other SIPP provider that would do 100%.

£1,000 charge is fine, but it's not worth it on only 50%

Cautious_Investor_3

Sippqs81 wrote: »

Thanks for the messages so far.

I am not allowed the post the relevant link I found, into this forum. However, MW Pensions dot co dot uk have a good pdf article which is relevant, entitled "Lending by a SIPP or SSAS".

I called MW and they stated that rules allow up to 100% loan, but they did not know of any other SIPP provider that would do 100%.

Glad you found someone who could help!