A pension plan can be funded by contributions (from the investor, their employer or any other person) or by transfers from another pension arrangement. A transfer from another pension can be in cash or can be a transfer of assets – usually where the other pension is self invested.

All pension contributions, however, must be expressed in cash under HMRC rules, but there are options for investors who wish to transfer personally-held assets to their SIPP.

Why you may want to make an in specie contribution

Since the introduction of “pension simplification” on 6 April 2006 it has been possible to transact with connected parties. This means that you (or a person connected to you) can sell assets directly to your SIPP at market value.  Your SIPP, however, may not have sufficient cash for this and you still want the assets to be transferred to it.  To do this it may be possible for a loan to be taken out by you personally and used as a contribution into your SIPP. The money in your SIPP can then used to purchase the assets and the proceeds you receive used to repay the loan. This is a well established process and more information and costs can be obtained from www.suffolklife.co.uk/connected.

However, this is not always possible and using an asset to pay the contribution can be a way to achieve the same result. This is called an ‘in specie contribution’. Legislation states that all contributions must be expressed as a cash amount, and to that end HMRC have set out a process which if followed ensures that the contribution of an asset in lieu of cash is acceptable.

The process is more complicated and risky than just paying in the assets and involves the establishment of a debt and the settlement of the debt with assets rather than cash. The process must be followed exactly so it is important that advice is sought to ensure everything is considered.

Please read the guide below in detail and speak with your adviser before considering an in specie contribution. In addition a number of documents are refered to in the guide which are also available below.

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Document name	Size	Download
In specie contributions 'how to' guide	704kb
Template 1st letter from investor	16kb
Example 1st letter from Suffolk Life	25kb
Template 2nd letter from investor	26kb
Suffolk Life Annuities stock transfer form	300kb
Suffolk Life Trustees stock transfer form	300kb
Broker to Broker form	53kb