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SIPPs
 
            

SIPPs

 
 

A Self-Invested Personal Pension (SIPP) is a personal pension set up for the self employed and individuals in non pensionable employment. It provides you with the option of choosing when, where and how you invest the assets of your pension fund. The range of investment options are extensive and include: property, structured deposits and direct investment in stocks and shares. The facility to borrow within your SIPP is also available. Further information on this is available from your financial advisor.

Why Choose a SIPP?

For the self-employed, a Self-Invested Personal Pension (SIPP) should be a consideration for the individual who wants control and choice of investments to fund for their retirement. A SIPP provides a tax-efficient environment in which earnings can be invested to provide retirement benefits for the self employed.

A SIPP provides you with considerable tax advantages:

Your contributions qualify for tax relief (subject to limits)
Investments grow free from Capital Gains Tax and Income Tax*
Deposits grow free from DIRT Tax
A tax-free cash lump sum can be taken at retirement
Any balance can be transferred into an Approved (Minimum) Retirement Fund
*Tax treatment of overseas investments will depend on tax rules applying in the jurisdiction where the investment is made, and how the investment is structured.

Funding the SIPP

You can benefit from tax relief on the contributions you make, up to a maximum of 40% of your earnings each year, depending on your age.

Age

Employee %

Under 30

15%

30-39

20%

40-49

25%

50-54

30%

55-59

35%

60+

40%

Source: Financial Regulator - 'Pensions Made Easy'

It is important to note tax relief is not automatically guaranteed, you must apply to and satisfy the Revenue requirements. An Earnings Cap applies to pension contributions for the purposes of tax relief. The Earnings Cap, which may change every year, is 115,000 for 2011.

 
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