The sole purpose of any pension scheme is to provide retirement and related benefits for its members. In this regard a Self Invested Personal Pension (SIPP) is no different to any other pension scheme. SIPP was given the "green light" in Nigel Lawson’s 1989 budget speech when he said, "I propose to make it easier for people in personal pensions to manage their own investments."
A ‘SIPP’ is a type of a Personal Pension which provides you a tax efficient way in which you can invest funds to build a regular income and a tax free lump sum amount when you reach an age above 50. It provides you with extreme freedom to divert your savings in any form of investments.
A member can take all or any part of his funds at any time between the ages of 50 to 75. He need not give up work if he does not wish to. The pension he receives will be taxed as earned income. But if he is unable to work due to various reasons such as health etc he may withdraw out the money before 50.
SIPP is different from traditional pension plans as it provides more control and flexibility to individuals to make any type of investments including cash, stocks, funds, bonds or even in commercial properties. SIPP also provides us with the freedom to transfer any form of asset held within a personal pension or an occupational pension, into a SIPP.
SIPP offers the best planning and tax reduction opportunities like Income tax, Capital Gains tax and Inheritance Tax.
Tax relief is available on your contributions to your SIPP at the highest tax rate you pay. SIPP’s key benefit is that a quarter of your pension fund can be taken as tax free lump sum and the remaining pension you receive from your fund is received after tax deductions.
No Capital Gains Tax is payable by you on any gains made by your SIPP. In case of your death before retirement there is no Inheritance tax to be paid on the assets distributed from the SIPP in the form of a lump sum within the two years of your date of demise.
Webmaster
Online Pension Plans
Article Source: http://EzineArticles.com/?expert=Joanne_Elizabeth
More Sipps Resources >>Self invested personal pensions articles
Self invested personal pensions blogs
A comprehensive glossary of self invested personal pensions and sipps related terms.
Looking for investment opportunities? Try our wide range of Dubai property for sale which is currently rewarding property investors with great returns
Sipps-Pension.co.uk and its affiliates provide information on self invested personal pensions ( SIPPs ) and other pension investments only. Advertisements for self invested personal pensions ( SIPPs ), pensions, mortgages and other related financial products are provided by third parties.
