sipp

Unlisted share purchase

One of our members was given the opportunity to invest in a successful company with a history of growth and development. This company, however, was unlisted.

Unlike some pension plans, a SIPP allows this kind of investment – so he instructed @sipp to invest £50,000 from his fund to purchase ordinary shares in the company.

We carried out due dilligence in association with our appointed legal adviser, and found that the company’s board would have to implement some changes before the purchase could be made. The board, seeing the opportunity that these new funds represented, were happy to make the changes – allowing the possibility for future investments in the company from pension funds.

As such, the shares were purchased – and now sit within the member’s SIPP, with any dividends paid out – free of any additional income tax, adding to the fund.

Please note:
• We’d strongly recommend that you discuss the risks of any investment in this area with a qualified financial adviser.
• We won’t consider this type of investment into a SIPP if the member is a controlling director (as defined by pension legislation), or a connected party to a controlling director of the unlisted company in question.