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SIPP charges are they legal

beverage_2
Posts: 2 Newbie
I currently have a sipp with Namulas in which I hold 2 commercial properties along with my business partner, we have decided that it is not viable to put a further property into the sipp due to a rental income on the property of around £10000.00 PA the charges would take around 20% of the rental income: The charges seen to be very high, but to change to a lower charging company we would have to sell the properties and buy them back in the name on the new sipp provider. This would incur stamp duty. This just dose not add up, so are we stuck with our present provider?
Are the charges made legal?
Is there any way that we can challenge the charge?
We seem too stuck.
Are the charges made legal?
Is there any way that we can challenge the charge?
We seem too stuck.
0
Comments
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Are the charges made legal?
I am not sure whether you are joking or not. However, on the assumption you are not, then no of course they are not illegal. A retailer decides how much they retail their products for and you decide whether you pay it or not.
Is there any way that we can challenge the charge?
The only way you can with any retailer. You take your business elsewhere.
Property in SIPPs is expensive and isnt really viable for many property investors. It is quite useful for the new business startups looking to finance a commercial property by using their pension fund and not their own liquid capital.
Are the commercial properties linked to your own trading or are they investment properties?
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The charges seen to be very high, but to change to a lower charging company we would have to sell the properties and buy them back in the name on the new sipp provider.
This seems unlikely.Have you approached an alternative SIPP provider to seek a quote and inquire how a transfer might work?
There exists an arrangment called "in specie" transfer which means that the assets do not have to be sold when moving from one provider to another. It's obviously particularly useful when property is involved, but also covers share and bond portfolios.Trying to keep it simple...0 -
I am not sure whether you are joking or not. However, on the assumption you are not, then no of course they are not illegal. A retailer decides how much they retail their products for and you decide whether you pay it or not.
The only way you can with any retailer. You take your business elsewhere.
Property in SIPPs is expensive and isnt really viable for many property investors. It is quite useful for the new business startups looking to finance a commercial property by using their pension fund and not their own liquid capital.
Are the commercial properties linked to your own trading or are they investment properties?0 -
I am only asking wither sipp charges could be treated the same way as bank charges
Most bank charges are legal. Its only penalty charges on debts where there is some doubt whether they are lawful or not. It is those particular charges that are under review. Not all the other bank charges.
Sipp charges are retail charges not penalty charges.
Do the charges reflect the true cost of the service provided?
No. Again, for the reason that they are not penalty charges. A retail or admin charge does not have to be justified or explained and does not have to reflect the work done. If it did then no company would ever make a profit. Some charges would come under consideration of the FSA's TCF rules but it wouldnt be the case here.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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