A Look at the Various Types of Self Invested Pension Plans

Anyone of retirement age is concerned about the future as regards the spending and earning power of a limited income. Investing can be an advantageous approach for many who are limited in their options to earn income, yet a mere superficial scan of the existing tax structures pertaining to pension funds prior to April of 2006 would make anyone other than a tax professional feel more than a little confused.

The various types of SIPP investment schemes that are now made available to pensioners can relieve much of the tax burden that they may have faced previously, while at the same time offering many more options for investing their precious retirement funds.

Commercial properties have always been a wise choice for investment, depending on the type of business and location chosen. Yet the taxable income received from these types of investments until recently was vulnerable to the usual 55% assessment. This taxation scheme has now been altered to allow for investing in properties like shops, offices, and warehouses at a significantly lower rate of taxation.

Collective investments, such as investment trusts, unit trusts, and open ended investment company trusts, also fall into the new lower tax brackets created by the Revenue. Insurance fund trusts can also become part of one's portfolio, further widening the scope of available investment schemes.

Investing in stocks and shares has always been an option, although the tax rates applied to any income earned from these trades made them doubly risky for the pensioner. Many stocks and shares are now included in the lowered tax structures for SIPP funds, including direct equities associated with FTSE listed stocks as well as many unlisted shares. Additionally, there are many overseas investments that can be included in a self invested pension plan.

This new flexibility also applies to banking practices. Deposit accounts and cash transactions concerning investments will also benefit from the lowered tax structures that are now in place. It should be noted that certain assets such as residential properties, fine art, and any gold bullion holdings remain in the higher tax brackets.

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