12
June
Gold in a Pension
Residents in the UK can now invest in gold bullion in their pension funds. UK citizens can as of April 2006 invest in gold bullion through their Self-Invested Personal Pensions (SIPPs). US citizens could already do so in their Individual Retirement Accounts.
SIPPs are Self-Invested Personal Pensions which are new types of personal pension schemes recently introduced by the UK government. The SIPP itself is a pension 'wrapper' that holds investments until you retire and start to draw a pension income. SIPPs allow investment in a range of different asset classes including gold bullion.
SIPPs are designed for people who want to manage their own pension fund by investing in assets of their choice. SIPPs allows individuals who pay income tax in the UK to invest their SIPP in a range of asset classes, one of which is gold bullion.
The UK government has included ‘investment gold’ as an approved asset class in SIPPs. Investment gold is classified as "gold bullion (that is, gold of a purity not less than 995 thousandths), which is in the form of a bar, or of a wafer, of a weight accepted by the bullion markets".
Investments made in gold bullion are topped up in the form of tax relief, meaning individuals can claim up to 40 per cent back depending on the income tax band they fall in to. It is important to realise that this means that gold buyers in the UK can now claim up to 40% tax back on investment-grade gold bullion.
One can invest up to 100% of your income within a SIPP Pension fund. The upper limit of the amount that you can invest is £215,000 and the maximum amount that can be invested within the fund is £1.5 million. If the fund value exceeds £1.5 million then the excess will be taxed at 55%.
Gold bullion is allowed in a pension fund providing the gold is immoveable and stored with a secure and regulated third party. It cannot be taken possession of and used as a “pride in possession” article. The Perth Mint Certificate Programme as the only government owned and run gold certificate programme in the world is thus one of the most popular ways for investors to invest in gold bullion in their pension fund.
