SIPPPs and Existing Investments

Paul_Varjak

cheerfulcat wrote:

Thanks, Paul Varjak. That was the impression I got from Hoodless Brennan as well. The chap I spoke to at HL must have been misinformed. It just goes to show, you're better double-checking these things! Too many rules...

I have also verifed this HL, they said I could put exisiting investments into a SIPP but only if they were sold and then repurchased! I think that is probably what they meant when they spoke to you.

cheerfulcat

Paul_Varjak wrote:

I have also verifed this HL, they said I could put exisiting investments into a SIPP but only if they were sold and then repurchased! I think that is probably what they meant when they spoke to you.

Hi,

The chap specifically said " you can transfer existing funds into ISAs without cashing them in first" then went to check and said " funds going into a SIPP have to be turned to cash and then moved in ".

I do think that there may be some confusion at some brokers, as I have heard complaints from others about being misinformed about the workings of their ISA.

dunstonh

You can do share exchange which they may be getting confused with. Its still classed as a sale but can be mistaken as a transfer.

cheerfulcat

dunstonh wrote:

You can do share exchange which they may be getting confused with. Its still classed as a sale but can be mistaken as a transfer.

???? Now I'm even more confused :-). Do you mean that it *is* possible to move a fund into an ISA?

dunstonh

You cannot transfer any existing assets into a SIPP. You can sell the assets and use money in the SIPP to buy it.

However, there are processes that allow this to be done behind the scenes without you actually seeing any money go through your bank account. One example of this is share exchange. This is where shares you may hold (or any equity which is transferrable which does include unit trusts and OEICS) are bought by the provider and in exchange they will give you the cash value to put into the product. You can then pick exactly the same investment or something different.

This is classed as a sale but I was wondering if the confusion with those you have spoken has arison over terminology. As you dont see the money and there is paperwork to "transfer" the holding into the SIPP and you may rebuy that asset in the sipp, it may be confusing when talking about it briefly over the phone.

cheerfulcat

Thank you, dunstonh, that is very interesting. So the effect will be that one has transferred a holding into a SIPP? No new initial charges/dealing fees?

dunstonh

cheerfulcat wrote:

Thank you, dunstonh, that is very interesting. So the effect will be that one has transferred a holding into a SIPP? No new initial charges/dealing fees?

Now that depends on the provider/IFA. The option exists to charge a fee. Although most don't.

Paul_Varjak

I think that even OEICS and unit trusts can effectively be transferred into a SIPP 'behind the scenes' if you currently hold the OEICS/unit trusts with a stockbroker in a nominee name.

The OEICS and untit trusts would have to be sold and re-purchased though, but I guess this could all be done automatically by the stockbroker if he was also the one you intended to obtain the SIPP wrapper from.

If the stockbroker gives full rebate on the initial commission you could, effectively, get your existing OEICS/unit trusts into a SIPP for free. Even better if the stockbroker doesn't charge for the SIPP wrapper either!

cheerfulcat

Thank you both for some very thought-provoking stuff.