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Can I make a loan to an unrelated individual for commercial

Resolved Question:

Can I make a loan to an unrelated individual for commercial purposes from a SiPP?
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello,
It is the trustees who make the loan and they will be responsible for agreeing the terms and conditions etc, not the member.
A SIPP can lend money to any unconnected third party, be it an individual or a company. However, it cannot lend any money to any business or individual who is connected in any way with the member, it cannot make a loan to a family member or to a business associated with the member.
HMRC states that all loans are only acceptable if they are genuine investments of pension schemes. They should be "prudent, secure and on a commercial basis".
On a "commercial" basis has not specifically defined by HMRC.
To answer your question though, yes, an SIPP can make a loan.
Customer: replied 3 years ago.
Great. Many thanks.
Expert:  TaxRobin replied 3 years ago.
You are most welcome.
Your positive rating is always thanks enough.
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