10: Investment rules

The rules on pension investment by self-invested schemes have in practice changed little with the arrival of the 2006 tax regime. Investment in residential property and certain other assets, such as fine wine, art, classic cars and antiques, is not banned, but attracts stringent tax penalties, including at least a 40% tax charge on the scheme member and sanctions on the scheme itself.

The rules on how much such pension schemes can borrow – eg to buy commercial property – were tightened up in 2006. The amount that schemes can lend to their sponsoring employers was also further restricted in some instances, although loans in existence before 6 April 2006 were not affected.Last Updated