Foreign assets in a SIPP
Discussion
Does anyone within PH hold any foreign assets in a SIPP?
My present SIPP provider doesn't allow it.
I want to buy a stand of forestry in New Zealand, chop it down and have all the proceeds go into my pension (there are significant tax advantages) - looks quite straightforward to me - can't seem to find the right provider.
My present SIPP provider doesn't allow it.
I want to buy a stand of forestry in New Zealand, chop it down and have all the proceeds go into my pension (there are significant tax advantages) - looks quite straightforward to me - can't seem to find the right provider.
Hmmm
I thought the whole point of a pension fund was to buy and sell in order to make money.
In my case the land has the equivalent of a rates value of £100,000 - the trees aren't valued for rating purposes (SIPP has a value of £65,000).
I have an estimate that the trees could be worth £150,000 if chopped down - 28% company tax here in NZ. Put through a SIPP could bring the tax down to more like 12%.
I'm sure some SIPPS allow foreign ownership.
I thought the whole point of a pension fund was to buy and sell in order to make money.
In my case the land has the equivalent of a rates value of £100,000 - the trees aren't valued for rating purposes (SIPP has a value of £65,000).
I have an estimate that the trees could be worth £150,000 if chopped down - 28% company tax here in NZ. Put through a SIPP could bring the tax down to more like 12%.
I'm sure some SIPPS allow foreign ownership.
PurpleMoonlight said:
You are still missing the point!
The profit you are making is not investment growth on the asset, the land, it is from the sale of the trees growing on the land. That is a trading profit not an investment profit, so would be subject to tax within the SIPP.
It's a Capital Gain isn't it ? How is that differentiated from a trading profit ?The profit you are making is not investment growth on the asset, the land, it is from the sale of the trees growing on the land. That is a trading profit not an investment profit, so would be subject to tax within the SIPP.
SIPP investment can include,
•quoted UK and overseas stocks and shares
•unlisted shares
•collective investments (such as OEICs and unit trusts)
•investment trusts
•property and land (but not most residential property) insurance bonds.
But note: it's "investment" not "trading". You can't stick a business in a SIPP and avoid tax.
As regards timber in NZ, you'd need to be lucky to find a SIPP provider who'd go along with that concept.
•quoted UK and overseas stocks and shares
•unlisted shares
•collective investments (such as OEICs and unit trusts)
•investment trusts
•property and land (but not most residential property) insurance bonds.
But note: it's "investment" not "trading". You can't stick a business in a SIPP and avoid tax.
As regards timber in NZ, you'd need to be lucky to find a SIPP provider who'd go along with that concept.
Ozzie Osmond said:
SIPP investment can include,
•quoted UK and overseas stocks and shares
•unlisted shares
•collective investments (such as OEICs and unit trusts)
•investment trusts
•property and land (but not most residential property) insurance bonds.
But note: it's "investment" not "trading". You can't stick a business in a SIPP and avoid tax.
As regards timber in NZ, you'd need to be lucky to find a SIPP provider who'd go along with that concept.
I have got 2 woodland (not large) in my SASS and I had to explicitly explain what the investment potential was and I was told that harvesting and selling the timber would be viewed as trading. Both are leased (back to me) and both leases exclude harvesting timber. I didn't challenge this so I am unsure as to whether I could have changed this clause - but even if I did the profit from the timber would be outside the pesnion.•quoted UK and overseas stocks and shares
•unlisted shares
•collective investments (such as OEICs and unit trusts)
•investment trusts
•property and land (but not most residential property) insurance bonds.
But note: it's "investment" not "trading". You can't stick a business in a SIPP and avoid tax.
As regards timber in NZ, you'd need to be lucky to find a SIPP provider who'd go along with that concept.
Potentially you could: buy wood. wait. sell a portion at a profit and harvest at cost neutral. wait. wait. sell a portion etc etc.
May get away with not being seen to trade but you would need a friendly provider.
Perhaps - maybe - I've found a solution.
Use the 25% tax free from the SIPP to buy the trees, have the proceeds from chopping them down paid into the SIPP.
This wouldn't be a problem with lifetime limits - and I couldn't claim any income tax back (no UK income and not UK tax resident).
Could HMRC try and charge some sort of tax on this transaction, or would it fall outside their jurisdiction?
Money taken out of the SIPP would be taxed as income in NZ only - as I can provide an NT tax code from NZ IRD.
Note if it's relevant - there is no CGT in NZ, but some gains here are taxed as income when they would be taxed as a capital gain in the UK.
Use the 25% tax free from the SIPP to buy the trees, have the proceeds from chopping them down paid into the SIPP.
This wouldn't be a problem with lifetime limits - and I couldn't claim any income tax back (no UK income and not UK tax resident).
Could HMRC try and charge some sort of tax on this transaction, or would it fall outside their jurisdiction?
Money taken out of the SIPP would be taxed as income in NZ only - as I can provide an NT tax code from NZ IRD.
Note if it's relevant - there is no CGT in NZ, but some gains here are taxed as income when they would be taxed as a capital gain in the UK.
Beware "pension recycling". Google that expression and you'll find lots of information. Including,
"Recycling big sums or breaking a host of other HMRC rules - including a ban on doing anything that is 'pre-planned' - can potentially attract charges amounting to 55 per cent of the sum involved."
Read more: http://www.thisismoney.co.uk/money/pensions/articl...
"Recycling big sums or breaking a host of other HMRC rules - including a ban on doing anything that is 'pre-planned' - can potentially attract charges amounting to 55 per cent of the sum involved."
Read more: http://www.thisismoney.co.uk/money/pensions/articl...
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