For UK unquoted equities, it is important to establish whether the proposed share purchase is allowable as a pension scheme investment.

We will assess any proposals in detail before allowing such investments. If you, or your client, are considering this type of investment, please read the Investment Guidance notes then complete and return the relevant form below:

For investment in an unconnected unquoted UK limited trading company we normally require at least three years' accounts demonstrating a successful trading record.

We will allow up to 25% of the net market value of the SIPP or SSAS for each UK unquoted equity investment at the point of advance/purchase. However, the total amount that can be invested in shares in, and/or for loans to, unquoted UK limited trading companies, must not exceed 75% of the net market value of the SIPP or SSAS, with the remaining 25% of the SIPP or SSAS assets to be held in readily-realisable investments, i.e. could be traded/sold for a reasonable price within 30 days. If the investments are in the same company, the maximum is restricted to 50%.

A minumum fund size of £100,000 is required

For shares in unquoted companies a balance of at least £5,000 in the SIPP or SSAS default bank account must be maintained after the loan has been made.

A SSAS can also fund the purchase of shares in a sponsoring employer

Whether the shares are quoted or unquoted they are subject to the following:

  • at the time of purchase, the market value of the shares in that sponsoring employer must be below 5% of the net market value of the scheme’s total assets.
  • the scheme may acquire shares in more than one sponsoring employer providing that at the time of purchase, the market value of the shares is less than 20% of the net market value of the scheme’s total assets. The shares in any one sponsoring employer of the scheme should be less than 5%.
  • the acquisition of the shares does not, and will not in the future, constitute indirect investment in ‘taxable property’.

Tax charges

There are a number of areas where investment in unquoted companies could involve the pension scheme member(s), sponsoring employer and/or the pension fund in substantial tax charges. For example, in certain circumstances, unquoted equities may be an indirect investment in taxable property, which is not allowed.

Although we make every effort to meet client objectives within their self invested pension investment portfolio, we will not allow any investment to be held that could potentially give rise to tax charges.

Please Note:  Although shares on the AIM market (Alternative Investment Market) are not treated as listed on a recognised exchnge, we treat AIM listed shares as a standard asset and therefore there is no restriction on the amount that can be held. However, before we will accept AIM shares within our schemes, they must be referred to our Technical Manager for approval.

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