Little Known SIPP Acceptable Investments

Little Known SIPP Acceptable Investments
Galapagos by Julian Cohen. Why?

When HMRC scrapped its permitted SIPP investment list in 2006, it opened the door to some very interesting and innovative SIPP acceptable investments

‘Unconventional’ SIPP Acceptable Investments Can Produce Massive Profits As The Conclusion Reveals

Nowadays, HMRC puts very few restrictions on SIPP investment.  The obvious areas to avoid, on pain of a massive tax charge, are quite clear: direct investment in residential property; ‘moveable tangible property’ such as wine, cars, antiques and art, to name a few.

It means ‘SIPP acceptable’ investment opportunities are incredibly wide and varied.  Although ultimately, it’s up to each SIPP operator to decide whether it wants to hold a particular asset within its SIPP.

Investments That Made It Into A SIPP

When SIPPs were first introduced back in 1989, commercial property was the main investment class.  Since that time, in addition to a host of shops, offices, factories, medical centres and other places of work, all manner of interesting properties have found their way into SIPPs.  Among them are:

  • a zoo
  • half an airport
  • two recording studios, one in Clacton and the other in Costa Rica
  • a nightclub
  • cheese factories
  • a football stadium

Whispers around the SIPP industry suggest that some commercial properties being held in a SIPP were being used as a brothel and to grow cannabis.

Land is a popular investment.  As Mark Twain said: “Buy land, they ain’t making it any more”.  The weirder end of SIPP land investments include allotments and fishing lakes. 

A reliable and profitable land investment is car parking, particularly in busy cities.  One of the most attractive has been permanently featured in our Invest area.

SIPP Investments That Were Rejected

In a cheeky attempt to present it as a ‘floating commercial property’, a Hull-based trawler wasn't acceptable.  Nor was a snow machine.

Whilst solar panels can be acceptable, delivering potential profits in an ethical manner, they can fall foul of the ‘moveable tangible property’ rules.  So SIPP operators tend to steer clear of them.  The same is true for wind turbines, although some of the largest have been accepted, for they’re almost impossible to move.

A Word Of Warning For Your SIPP

Just because it’s SIPP acceptable is no guarantee of success.  The onus is on you to do your due diligence.

History has shown that some of the biggest loses have occurred with off-plan property developments.  Not just because the developer got the sums wrong.  Often because the money was salted away by the developer, never to see the light of day again.  Some have gone spectacularly wrong, costing SIPP holders hundreds of millions pounds. 

Sadly, many of the carbon credit schemes were just plain scams. And it's recently been revealed that a number of UBS employees have been shocked to find out their SIPPs had exposure to the Madoff Ponzi scheme.

And Finally The Good News

My English teacher always used to say “End with a bang, and not with a wimper”.  What I'm about to reveal can only be described as an explosion! 

Four years ago, and nothing to do with SIPPclub, one of our members invested £100,000 into a Thai Forestry investment, growing Agarwood.  The resinous wood is used for incense, as well as medicinal purposes, and pure resin in its distilled form goes into perfume.  When the trees were harvested over a one year period, it returned tax free to his SIPP just over £40,000 every month.  Overall, the £100,000 grew to £512,000, equivalent to a compound interest return of 50.4 percent per year, making this one of the highest earning SIPP investments ever! But it also came with some of the highest risk, and for that reason, it wouldn't be for the faint hearted.

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AJ Bell Is Often The Best Value SIPP For Stockmarket Assets

That's our opinion.  Not just because AJ Bell was the first company to offer an online SIPP.  Nor that it's received many prestigious awards.  And not even because the wife of SIPPclub's Founder has an AJ Bell SIPP.  It's because it's one of the most competitive stockmarket SIPPs on the market. 

Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).  However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.

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As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk.  Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.

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