Switching my shares into my SIPP account

ukonlineshopping

Hi,

I've got a £15k pension account with Aegon. I am mid 20s and haven't paid in to it for years and not planning to.

Only got £55k left on my mortgage and looking to get hold of this pension money to get my mortgage down.

Here is my idea:

I hold a largeish chunk of shares in an illiquid AIM share, I switch my pension to a SIPP and then put a sell order for £7.5k of my personal shares at say 50p(double what I paid) and then match the order with £15k from my SIPP with my broker.

I then make £7.5k that comes off my mortgage and the shares are in my pension(albeit at double the price but have 25 years to grow, anyway not that bothered about this small pension pot)

CannySaver_2

Not sure that will work, the SIPP has to buy the shares at a commercial / market rate, if your SIPP is buying the shares at double the current market value I'm not sure the SIPP trustees will allow the trade through as it is clearly above market value.

The Canny Saver

SippTechie

If your SIPP enters into any transaction with you personally at anything other than the true market value then you will have to pay very significant tax penalties to HMRC. You'd be looking at a tax penalty of around 55% of the difference between the market value and the transaction value.

As your SIPP provider is obliged to report any transaction of this type to HMRC, and won't look very clever in the eyes of HMRC for letting you do this, I'd be surprised if you can find any who will let you carry out the deal.

thenudeone

You would be trying to get tax relief on a "contribution" of £15k which is only really valued at £7.5k.

Can't see anyone touching this with a barge pole.