Download Introduction - Corporate and Professional Pensions Ltd

C&P SIPP
(Self Invested Personal Pension)
Information Booklet
Corporate & Professional Pensions Limited
2nd Floor, Access House, Church Street,
Basingstoke, Hampshire RG21 7QQ
Tel:
01256 329949
Email:
[email protected]
Web:
www.candpsipp.co.uk
2nd Floor, Access House, Church Street,
Basingstoke, Hampshire RG21 7QQ
Registered in England No 2810635
Tel:
01256 329949
Email: [email protected]
Authorised & regulated by the Financial Services Authority
Web:
www.corporateandprofessionalpensions.co.uk
Corporate & Professional SIPP
Information Booklet
Introduction – C&P SIPP
The Corporate & Professional Self Invested Personal Pension (C&P SIPP) is a tax efficient and cost effective appropriate personal
pension which has been set up under trust and approved by HMRC as a registered pension scheme under reference (PSTR) 00605683
RX.
The C&P SIPP is available for individuals, or groups, who want flexibility and control over their retirement funds, together with clear and
transparent charges.
The term ‘self invested personal pension scheme’ is used in the sense that you, the member, are able to direct how your contributions
are invested. You may also make choices about what permitted assets are bought, leased or sold and decide when those assets are
acquired or disposed of.
The C&P SIPP provider is the Bank of Scotland who also provide banking facilities to the Trustees for individual client accounts. The
Bank of Scotland are highly experienced in providing services to pension trustees, in particular to trustees of SIPPs, and offer very
competitive interest rates for a cheque paying current account. The Bank of Scotland is authorised under the Banking Act 1987.
Providing that all monies initially pass through the scheme account member’s may request that other accounts are opened with
alternative banks.
Corporate & Professional Pensions Limited act as both Trustee and Administrator of the C&P SIPP.
This plan allows you to invest in the whole range of permitted investments, including commercial property, but we would recommend
that you take advice as certain investments, although allowable, may result in a personal or scheme tax charge.
You may appoint any authorised investment manager(s) or alternatively you may decide to manage the investments yourself.
When you decide to take benefits from the plan (Crystallisation) you may select from the full range of retirement income facilities such
as tax free cash, annuity purchase, income drawdown, phased retirement, alternatively secured pension or a combination of these.
The Trustees of the SIPP are allowed to obtain a loan equal to 50% of the plans net fund value and this is particularly useful when used
in connection with the purchase of commercial property. Several members may combine their plans together to make the purchase.
The Plan enjoys the normal tax advantages associated with personal pension schemes:

Personal contributions may qualify for tax relief at your highest rate of income tax and are paid into the scheme net of basic rate
income tax which is then reclaimed from HMRC and added to your account


Higher rate tax relief is reclaimed through self assessment tax returns
Investments held within the plan are exempt from income or capital gains tax (except on UK dividends)

When benefits are taken, a tax-free lump sum of 25% of the fund value may be taken although a higher certified amount may be
available following a transfer.
As with all pension plans, the sole purpose of the SIPP is to provide benefits for retirement (Crystallisation) and the investments chosen
should reflect this.
The information contained in this booklet is subject to our understanding of current law, practice and taxation which may be subject to
change.
You may contact us at the following address:
Corporate & Professional Pensions Limited
2nd Floor, Access House, 25-29 Church Street, Basingstoke, Hants RG21 7QQ
Tel:
Fax:
01256 329949
01256 353954
E-mail: [email protected]
Website: www.candpsipp.co.uk
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Corporate & Professional SIPP
Information Booklet
About Us
Corporate & Professional Pensions Limited (CPPL) was established to provide pension administration and trustee services to a
range of pension schemes including Money Purchase and Small Self Administered Schemes. We are authorised and regulated by the
Financial Services Authority to establish, operate and wind up personal pension schemes and our FSA Firm Reference Number is
465748.
CPPL act as both Administrators and Trustees of the C&P SIPP. The role of the Trustee/Administrator is to control what is happening
and to ensure that the requirements for continuing tax approval are met. The Trustee is also the legal owner of the assets which are
held for the sole benefit of the member.
How Does the Plan Work
To become a member of the C&P SIPP you simply complete an application form which establishes an arrangement for you and will be
known as the: “C&P SIPP – (your name)”. A separate bank account opening form is also required and in some circumstances a
Supplemental Deed may be required.
All payments are made through the bank account, including any income tax that is reclaimed on contributions, and the member
receives a monthly statement which shows the movements in the account.
As a member, you will be a mandatory signatory, jointly with the Trustees, on all financial transactions except for the payment of fees,
which CPPL have the authority to deduct. You may however delegate CPPL to act on your behalf by signing the appropriate authority.
You may wish to appoint an Investment Manager or Financial Adviser to manage the investment of your C&P SIPP, alternatively, you
can manage this yourself. The Trustees will record and monitor the transactions to ensure the Plan continues to comply with HMRC
legislation.
Because a SIPP is exclusive to the individual and can contain a range of different investments it is not necessary to hold a number of
different pension policies to get a wide investment spread. The SIPP will hold them all under one umbrella.
Once set up, a SIPP can receive regular or occasional payments, subject to HMRC limits. There are no minimum contribution levels.
You can also transfer-in funds from other registered pension schemes and pension schemes that are acknowledged as such from
foreign countries.
The C&P SIPP may now accept Protected Rights transfers.
Eligibility
Anyone can apply to become a member of the C&P SIPP, however, you may not make any contributions after your 75th birthday.
Contributions may also be made by someone else on your behalf such as an employer or spouse / civil partner or other third parties but
tax relief will only be available to the member.
You will only be eligible to receive tax relief on your contributions if you are a ‘relevant UK individual’. An individual is a relevant UK
individual for a tax year if:


The individual has relevant United Kingdom (UK) earnings chargeable to income tax for that year,
The individual is resident in the UK at some time during that year,

The individual was resident in the UK both at some time during the five tax years immediately before that year and when the
individual became a member of the pension scheme, or

The individual, or the individual's spouse, has for the tax year general earnings from overseas Crown employment subject to UK
tax.

Under the new rules, you may contribute to any number of pension schemes within a tax year even if you are also a member of
your employer’s occupational pension scheme. A SIPP may be established on behalf of a child under the age of 18, by a parent or
legal guardian.
Contributions
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Information Booklet
There are three factors that can affect contribution levels and these are the lifetime allowance, the annual allowance and the input
period.
The lifetime allowance acts as an upper limit on the value of all your pension funds and the limit for this year (2009/2010) is currently
set at £1.75 million (£1.8 million for 2010/2011). If you have elected for primary or enhanced protection then this limit will be adjusted.
Under the new rules you may receive tax relief on your contributions up to 100% of your earnings, or if you have no earnings you may
receive tax relief on contributions up to £3,600 per year.
The maximum contribution amount that you can receive tax relief on each year is called the ‘annual allowance’. This has currently been
set for the following tax years as follows:
Tax Year
2008/09
Annual Allowance
£235,000
2009/10
£245,000
2010/11
£255,000
If you contribute more than the Annual Allowance to pension schemes in any tax year a 40% tax charge will be applied on the excess
amount. This includes all contributions paid into your SIPP and any other plan including those made by an employer or by someone else
on your behalf.
The annual allowance restricts the amount that you may contribute, but you may also adjust the input period which determines into
which financial year your contributions fall. The C&P SIPP always ends the first input period on the 5 April following the payment of the
contribution. This period may be adjusted by either the member or the trustee provided that there is not more than one input period in
each financial year.
Earnings which you can use to base your pension contributions on are referred to as ‘relevant UK earnings’ and can include:


Employment income,
Income which is chargeable under Schedule D and is immediately derived from the carrying on or exercise of a trade, profession

or vocation (whether individually or as a partner acting personally in a partnership), and
Income to which section 529 of Income and Corporation Taxes Act 1988 (ICTA) (patent income of an individual in respect of
inventions) applies.
Relevant UK earnings are to be treated as not being chargeable to income tax if, in accordance with arrangements having effect by
virtue of section 788 of ICTA (double taxation agreements), they are not taxable in the United Kingdom.
An individual who does not satisfy the relevant UK individual requirements can make unlimited personal contributions to a registered
scheme but will not receive any UK tax relief.
“In specie” contributions will be considered were the value of the contribution can be clearly and accurately defined. This is when a
contribution is made by transferring an asset into the pension scheme at its commercial value. Special rules apply to this type of
contribution and further information is available on request.
Transfer payments may also be received from UK approved pension arrangements without reference to net relevant earnings although
in some cases further information may be required.
Tax Treatment
Funds within a SIPP are free from UK income tax and capital gains tax. (It is not now possible for pension funds to reclaim tax paid on
dividends from UK companies).
Contributions from “Relevant UK Earnings” are subject to income tax relief at basic and higher rates as appropriate in the tax year
concerned.
Employers may contribute directly on behalf of employees and may receive relief from corporation tax as a business expense. Employer
contributions will be subject to HMRC’s ‘wholly and exclusively for the purposes of the trade’ test to ascertain that the contribution is a
valid business expense. Contributions from employers are paid gross.
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Corporate & Professional SIPP
Information Booklet
The term Crystallisation is now used to define the point at which benefits are taken and normally a lump sum of up to 25% of the fund
value may be taken at Crystallisation. In some circumstances this may be greater if a previous transferring scheme provided a higher
certified figure.
Pension income taken as an annuity or as drawdown is liable for income tax as earned income, subject to your tax rates and allowances
at that time.
Transfers In
Transfers can be accepted into your SIPP from any UK registered pension scheme, including “in specie” transfers.
The C&P SIPP may receive transfers arising from being contracted out of the State Second Pension (S2P) or the State Earnings Related
Pension Scheme (SERPS).
Existing benefits from personal pension schemes may be transferred into your SIPP even if they are already in income drawdown
(unsecured pension or alternatively secured pension) under the transferring scheme. The benefits will be restricted to the same
maximum benefit as the transferring scheme and the same review date will be used.
Range of Investments
The C&P SIPP allows you to invest in most allowable investments including the following:

UK quoted stocks, shares, gilts and debentures


Shares quoted on the Alternative Investment Market (AIM)
Stocks and shares traded on a recognised overseas stock exchange


Unquoted shares *
Futures and options relating to shares quoted on a recognised stock exchange

Hedge funds


Bank and Building Society accounts
Unit trusts, OEICs and Investment trusts


Insurance Company funds
Commercial property and land

Gold bullion
* Unquoted shares will need special consideration and you should let us have details of any proposed purchase as we may not be able
to enter into certain transactions.
A valuable concession for SIPP’s is the ability to purchase a commercial property, which may then be leased back to the members’
business or to a third party. Several members may pool their funds, or part of their funds, for this purpose and may also borrow up to
50% of the net funds available.
Your investments can be altered at any time to meet your changing circumstances. For example, in the years just before retirement you
may wish to reduce your risk exposure and to consolidate any gains prior to annuity purchase, or to reduce volatility for income
drawdown. Within certain limits, investments within a SIPP can be freely bought and sold.
Taking Benefits Options - Crystallisation
Benefits may currently commence on reaching age 50 (age 55 from 2010) and it is not necessary to actually cease employment or stop
making contributions.
Part of the fund (up to 25%) may be taken as a tax-free lump sum and the balance must be designated to provide an income in one of
the following ways:
Unsecured Pension (USP) - your pension fund remains invested and you draw a pension from the fund, which is known as income
withdrawal, up to the maximum level set by HMRC. The minimum level of income may be set at “nil” and varied, up to the maximum at
any time. A review is carried out every five years but conversion of other unsecured funds will cause a further review.
A review may be requested by the member on each anniversary of the reference period and this must be completed before the
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Corporate & Professional SIPP
Information Booklet
anniversary date.
The maximum level of pension is set by reference to the Government Actuary’s Department’s (GAD) rates which are based on age and
the value of the unsecured pension fund at the date the funds are first designated. The maximum limit is recalculated every five years
when the new limit for the next period is set. Currently you may take up to 120% of the GAD rate.
Because your SIPP is divided into segments you may vary the income each year and construct an income pattern to suit your needs.
Once an income stream has commenced it may still be stopped so that you have complete flexibility.
Alternatively Secured Pension (ASP) - this is an option to continue taking income withdrawal beyond age 75 without having to
purchase an annuity.
It allows you to continue directing your own investment strategy but also gives you the opportunity of purchasing an annuity with
some or all of your available funds at any time.
The maximum alternatively secured income is restricted to 90% of the GAD rate but there is a minimum income level that you must
draw and this is set at 55% of the GAD rate. Reviews are carried out annually for Alternatively Secured Pension.
Annuity purchase involves converting the investments within the SIPP into cash and buying an annuity at the then current market
rate, with any one of a number of insurance companies. It is worth shopping around for competitive terms. The rates on offer will
reflect the general level of interest rates at that time and may be higher or lower than at present. Short term annuities may also be
considered.
Phased retirement enables you to take part of your pension as required over the years from age 50 up to age 75. Your pension will
be divided into segments so that you can take any number of the segments as tax-free cash plus annuity or drawdown when you
decide. For example, if you take partial early retirement you may need some, but not all, of your pension for a few years.
It is also possible to run a systematic programme of phasing so that each year you can take a certain number of segments to give you
tax-free cash combined with pension which will be sufficient to meet your annual expenditure. The number of segments you need to
take each year to maintain your income level should decrease, as you will be adding to the pension level of the previous year.
Provided you do not need the tax-free lump sum for other purposes, systematic phased retirement is a useful way to reduce the tax
payable on your income, particularly in the earlier years. In addition, the death benefit on the unused segments is the full fund value,
which under current law and practice is tax-free.
Scheme Pension is a term used to provide a pension that is actuarially assessed and although it is not allowed under the terms of this
plan we can provide individual arrangements that will accommodate this facility.
Position on Death
In a SIPP the position on death depends upon the age reached.
If you die before age 75 and are not taking income withdrawals a lump sum up to the value of your personal lifetime allowance can be
paid to any nominated beneficiaries, who may be your spouse, civil partner, dependent or other individuals and this will normally be
free of any tax.
If you die whilst taking unsecured pension your SIPP may provide:

Unsecured income to continue until your spouse or civil partner reaches age 75, or,


To another dependent, such as a child, who may receive an income until he reaches age 23, or,
Your spouse, civil partner or dependent may purchase an annuity, or,


If over 75 your spouse, or civil partner can convert the fund to an alternatively secured pension, or,
The remaining fund can be paid to your spouse, civil partner, dependent or estate less a tax charge of 35%.
If you die whilst taking alternatively secured pension from your SIPP:

Your spouse, civil partner or dependent may purchase an annuity, or,


If under 75 your spouse, or civil partner can convert the fund to unsecured pension, or,
If over 75 your spouse, civil partner or dependent may continue alternatively secured pension.

The remaining fund may be paid to your spouse, civil partner, dependent or estate but there is a punitive tax charge.
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Corporate & Professional SIPP
Information Booklet
You may nominate a registered charity to receive a lump sum which should be free of Inheritance Tax.
Charges
Charges for the Plan are very competitive. Where possible, there is a fixed fee for each item of service which is not related to the size of
fund, so the larger your fund grows the more economical the cost. Furthermore, we only charge you for the services you use, subject to
the current charges schedule, and not for facilities that you may not need.
There are certain things that have to be done to set up a new SIPP and keep it running in good order each year. CPPL charge an
ongoing annual fee for administration but do not charge an additional setting up fee.
Extra services such as property purchase, are normally charged on a fixed tariff basis but we will negotiate fees for grouped purchases..
If there is an exception to this you will be advised in writing before any further work is undertaken.
Your adviser’s remuneration can, if you wish, be paid out of your fund subject to whatever explicit arrangements you agree and
authorise.
To become a member of the C&P SIPP please ensure that you complete the following:
Application Form, including the Bank of Scotland Pension Account Application
In order for us to comply with anti-money laundering legislation, please will you also forward certified copies of the following:
Passport or Driving Licence and one utility bill showing your name and current address
Cancellation Rights:
Cancellation Rights apply to your SIPP and you will normally have the right to cancel your application within 30 days. This time limit
applies from the date that we receive your application and a letter will be sent to you to remind you of your rights.
During the cancellation period we will retain any contributions made and or transfer values received in your designated SIPP Bank
account until the cancellation period has expired. No investments will be made during this period.
However, if you wish to make investments immediately you may waive your rights to the cancellation period by completing the
appropriate section in the application form and signing the declaration.
Execution Only Confirmation:
Corporate & Professional Pensions Limited act as the administrator and trustee to the C&P SIPP and do not give advice to you in
relation to the establishment or suitability of this SIPP for your circumstances.
Your SIPP will be established on an execution only basis and we do not give advice on either investments or pension transfers.
Complaints:
If you are not satisfied with any aspect of the services provided by us, you should write to the Managing Director at Corporate &
Professional Pensions Ltd setting out the details of your complaint and this will be dealt with in accordance with our complaints
procedure.
If you are not satisfied with our response to your complaint you may refer your complaint to the Financial Ombudsman Service (FOS) or
the Pensions Ombudsman. Your legal rights will not be affected by addressing your complaint to either of these bodies.
Where your unresolved complaint refers to the administration of your SIPP you should contact The Pensions Ombudsman, who are an
independent organisation set up to adjudicate between us so that any problems may be resolved. They can be contacted at:
The Pensions Ombudsman
11 Belgrave Road, London SW1V 1RB
Tel:
020 7821 0065
Email:
[email protected]
Where your complaint is about the marketing of your SIPP you should refer your complaint to The Financial Ombudsman Service, who
provide consumers with a free independent service for resolving disputes with financial firms. They can be contacted at:
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Corporate & Professional SIPP
The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR
Tel:
Email:
Information Booklet
0845 080 1800
[email protected]
Corporate & Professional Pensions Limited are covered by the Financial Services Compensation Scheme (FSCS) so that in the event of
us becoming insolvent you may be able to claim compensation. Further details can be obtained from:
The Financial Services Compensation Scheme
7th Floor, Lloyds Chambers
Portspoken Street
London E1 8BN
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Corporate & Professional SIPP
Information Booklet
APPENDIX 1
Menu of Charges (Prices excl VAT)
Setting-Up Fee
CPPL do not charge a setting up fee.
£0
Annual Fee
£350
An annual fee of £350 + VAT is payable on joining the Plan and on each subsequent anniversary. This fee is reduced for groups of
three or more members
The first years’ annual fee is due when your account is opened and will be charged either by invoice or when the funds become
available in your SIPP, depending on your preferred payment option. Each year’s subsequent annual fees will be charged on the
anniversary of opening the SIPP.
Bank Account Transaction Fee
£0
A bank account will be set up with the Bank of Scotland within the Plan but there is no charge for this facility.
Transfer Payment Fee
£0
No fees will be charged in respect of transfer payments into, or out of, the Plan.
Note: An additional charge may apply in respect of ‘in-specie’ transfers of assets and this will depend on the complexity of the transfer.
Details will be provided on request.
Contribution Fee
£0
No fees are charged for handling single or regular contributions.
Income Drawdown Annual Admin Fees
£60 + VAT per annum
An annual income drawdown administration fee of £60 + VAT is payable from when income drawdown commences. Under phased
drawdown, the annual income drawdown administration fee remains at £60 + VAT, regardless of the number of tranches.
Additional Notes:

The above fees are correct at time of printing; we reserve the right to increase the fees each year based on the increase in the
National Average Earnings index during the previous year

The above fees can be amended at any time subject to three months notice

All transactions are subject to disbursements, where applicable. In particular, a bank charge will apply to any telegraphic transfers
from the Plan’s bank account.

CPPL reserve the right to charge additional fees for any matters not covered above.
Property Transaction Fees
£350
A fee of £350 + VAT is payable in respect of each property purchase or sale if one of the Trustee’s nominated solicitors is used. In
addition, all the expenses of the transaction, i.e. surveyor’s legal and any other professional fees, stamp duty, disbursements, etc, must
be met.
Property Administration Fee
£100
There is an annual property administration fee of £100 + VAT if a professional property manager is appointed to manage the property
(in addition to the property manager’s fees). This fee will be increased to £300 + VAT if no professional property manager is appointed
to manage the property.
Property VAT Registration
£100
Property VAT Annual Admin Fee
£100
If the property is to be registered for VAT then there will be a one-off fee of £100 + VAT for registering the property for VAT and an
ongoing annual VAT administration fee of £100 + VAT.
Property Loan Set-Up Fee
£100
Property Loan Annual Admin Fee
£100
If a loan is taken out to finance the property purchase then there will be a one-off fee of £100 + VAT for setting-up the loan and an
ongoing annual loan administration fee of £100 + VAT.
Property Notes:
(a) The above fees may be increased in high value or complex cases, including overseas transactions and purchases at auction.
(b) Where a property is purchased for more than one member, an additional fee of £100 + VAT per member will apply in respect of
the second and subsequent members.
(c) If a property transaction is aborted then a fee will be charged based on time charges.
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