New Tax-Efficient UK Pensions Product

by Amanda Banks, Tax-News.com, London

20 September 2006

UK wealth management firms Capita SIP Services and Octopus Investments announced this week the launch of a product combining the tax benefits of venture capital trusts (VCTs) and self invested personal pensions (SIPPs).

The firms claim that the product, which is only available through independent financial advisers, takes advantage of 'A' day legislative changes, which permit a broader range of investments and the opening up of connected party transactions, to create the potential for returns of 38% a year on pension contributions.

Simon Rogerson, CEO of Octopus said: “We knew how attractive combining SIPP and VCTs would be and are delighted that we are the first to make it happen. The key for investors is the ability of the SIPP provider to manage the product. Capita is way ahead of their competition and we have created a highly attractive investment.”

Graham Coxell, director of business & commercial development for Capita Financial Services said: “We have been chosen by Octopus to support this creative proposition, which is the first of its kind and further demonstrates Capita’s ability to enable the delivery of high quality wealth management products. Indications are that IFA interest is already very significant.”

Venture Capital Trusts were introduced by the UK Government in 1995 to encourage individuals to invest in UK smaller companies by offering a series of very attractive tax benefits. Nearly GBP3 bn has been invested in VCTs.

Capita SIP Services is a leading administrator of specialist personal pensions. The company is based in Salisbury where it provides a range of services to a number of major life offices, private client stockbrokers and investment trust providers. Capita SIP Services is a trading division of Capita Life and Pensions Regulated Services Ltd which is authorised and regulated by the Financial Services Authority.

Octopus Investments specializes in investing in smaller companies and is one of the largest VCT fund managers in the UK. In 2005, Octopus raised over GBP60 million from around 6,000 investors in its range of VCT funds. Octopus Investments VCT has been shortlisted in the 2006 Investor AllStars Awards for the third year running as 'Venture Capital Trust of the Year'. Octopus also provides an EIS portfolio service called Eureka, as well as a capital protected inheritance tax solution called The Octopus Protected ITS.

Recommended