Pensions Week: News: Additional Sipp withdrawals spell trouble
Pensions Week: News: Additional Sipp withdrawals spell trouble.
Self-invested personal pension (Sipp) and small self-administrated scheme (SSAS) administrators should be wary of allowing clients to strip out their money, according to Curtis Banks.
Talbot & Muir announced last month its decision to allow any Sipp or SSAS client to withdraw up to 25% of their pension fund each tax year on top of the government actuary department's maximum withdrawal amount.
HM Revenue & Customs (HMRC) said it would "act appropriately where it identifies any abuse of the pensions tax rules", but Curtis Banks' managing director Rupert Curtis believes it would take a dim view on any strategy designed to help clients avoid paying tax.
"If HMRC clamps down on what it sees as abuse, and it will doubtless be monitoring recent developments very closely, this will not only result in administrators suffering, but advisers and their clients, too," he said.
"Headline-grabbing initiatives could result in long-term damage to the reputation of the self-invested pensions industry. More immediately, advisers and their clients need to be fully aware of the risks involved in breaching the pension rules this could very well blow up in their faces.
Curtis confirmed his firm had initially looked into unauthorised payments for its clients, but after taking advice from former Inland Revenue employees, had decided that the move would be "asking for trouble".
"Unauthorised payments are not the only danger area. Certain providers are increasingly exploiting other grey areas and loopholes in the A-day legislation. This could again tarnish the industry's image."
- Charlie Kirby
- 9 September 2009