Is this the end for Pension Inspecie Transfers? Reply


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An inspecie transfer is generally either a transfer of property from a company/individual or pension scheme to a pension scheme.

These are relatively common and usually occur between different Small Self-Administered Schemes (SSASs) and/or Self-Invested Personal Pensions (SIPPs), otherwise known collectively as Investment Regulated Pension Schemes.

Of course an investment regulated pension scheme is under no obligation to accept an in specie transfer. The trustees of a SSAS and the scheme administrator of a SIPP will review the offered asset to make sure that:

  • a proper market valuation has been made
  • it’s suitable for the investment strategy of the scheme

Inspecie transfers generally create tax refunds, just as they would have done had they been a cash contribution which is tax free or tax deductible for companies.

However, according to Citywire 18th Aug 2016, HMRC have decided they don’t like Inspecie Transfers

In recent weeks the tax man has challenged pension providers over the practice of in specie transfers which allow people to put non-cash assets into their retirement plans. Provided strict criteria are met, individuals can claim back tax relief on the transfers just as they would with a normal contribution into a pension.

Neil MacGillivray, chairman of the Association of Member Directed Pension Schemes’ (Amps), told Citywire’s New Model Adviser there was a ‘very strong possibility’ HMRC could ask for tax relief back on contributions stretching back to 2009. This would have significant ‘financial costs’ for individuals and pension providers he said.

I can’t see why HMRC have an issue with these transfers? why does it matter whether the contribution is inspecie or for cash?

steve@bicknells.net

 

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