Stand-out Q – SIPP loan to a company…

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FRI, 24 MAR 2017

Our Technical Hub provides access to a wide range of pension tax and trust technical resources. Every now and then we post tweets covering stand out questions from our technical content and our answers in case others might also find them helpful. As Twitter’s character restrictions only allow for the bare bones of the Q&A we link to the details here, too.

Question:

Can a member use their SIPP to make a loan to a company?

Answer:

A loan made by the SIPP to a company connected with the SIPP member will result in an unauthorised payment. For this reason SIPP providers will not allow such a loan. The company is connected to the member if the member has control of the company, or the member together with persons connected to him/her have control of the company. Control in this context means that the member has the power to secure that the affairs of the company are conducted in accordance with his/her wishes. In the absence of any connection the SIPP provider would need to be satisfied that the loan is a genuine SIPP investment i.e. prudent, secure and on a commercial basis.

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