P2P lending in a SIPP

Hmm ... good question. Conceptually they are very similiar, but .... TC has far less reliance on tangible asset security, and most PG's are unsupported, and hence as enforcable as those on FC. TC are purely a listings portal and account management operation, the due dilligence rests soley with the loan introducer (sponsor in TC parlance) where as AC do their own due dilligence as well. I think with TC there needs to be much greater lender due dilligence.

Communication and IT are worlds apart.

TC has no shadow bid facility, and drawdown delays are inevitable and sometimes significant. I only go for loans with tangible asset security, and they of course take longer to action legally than a bog standard all assets debenture + PG.

TC doesn't provide a tax statement, the account statements are quite rudimenatary and there are now question marks about the suitability of these as evidence to HMRC.

And whilst the secondary market is close to disfunctional, one user of the old TC forum provides and updates a spreadsheet which de-mistifies the current crop of offers.

Beyond that, yes you would get along with TC. It is worth joining and lending £1000 to get access to all the historical data ... as P2P borrowers do have a tendancy to appear on multiple platforms over time.

How would this be different from investing outside a sipp and then making personal contributions to sipp to claim tax back?

PGs: most are unsupported but not all. varies from sponsor to sponsor. I also note that one particular sponsor recently offerred supported PG on a listing contrary to their prior practice. It certainly felt like a reaction to their recent track record on recoveries on a few loans which had gone pear shape. I suspect things may change generally going forward.

Lender due dil is helped by the way the Q&A works.


ah, yes.

I would say that overall draw down delays are better than AC. This is of course not an issue on AC if you qualify as a Nazgul..

Depends what you mean by dysfnctional. Difficult to use / understand / price absolutely, and fees make it a problem. But liquidity is not too bad. So dysfunctional in relation to the former considerations, but not the latter.

At the end of the day higher rate taxpayers still get relief at their marginal rate, because what gets paid into the SSAS does not get distributed as dividends (on which there would be higher rate tax to pay).

Also at least some of the tax relief is only temporary because the pension will in due course be taxable (subject to the tax free lump sum), albeit possibly (if you are currently a higher rate taxpayer) at a lower rate.

Just in case anyone is unaware, it is already possible to lend through AC via a SIPP (or SSAS).

I have pasted verbatim below term 3 from the Terms & Conditions tab on the AC public website:

"3. Pension Funds and Trusts
 3.1 If you are a trust, you must inform the Assetz Capital Companies of that and use a Username that includes the word "TRUST".
 3.2 If you are a pension fund, you must inform the Assetz Capital Companies of that and use a Username that includes the word "SIPP".
 3.3 In the case of a Lending Member which is a trust or pension fund, the Lending Member will be the legal entity constituting the relevant trust or pension fund and not the beneficiaries of that trust or pension fund.    Accordingly, payments on account of interest and capital which are payable to the trust or pension fund cannot be paid directly to the beneficiaries and must be paid to the bank account of the relevant trust or pension fund.
3.4 The Assetz Capital Companies acknowledge that pension funds are usually subject to restrictions on the entities to which they can lend and, in particular, are prohibited from lending to their associated employer business. Whilst the Assetz Capital Companies will endeavour to identify and draw the attention of Lending Members to any lending opportunities which would infringe such restrictions, they accept no liability or responsibility in this regard.  "

Waw, never knew this, thanks for sharing your knowledge!

Other question, If i lend through my company, does the contribution have to be made to an SSAS and not a Sipp? (I happen to be a company director and  made contributions to my Sipp in the past)

I figure you already knew this but just in case thought I should clarify, capucino, that pension "permitted investment" rules still do apply to loans made from directly *from* your SIPP/SSAS. 

These  rules are pretty strict.

EG residential property is not permitted; this means not just no loans to buy residential property, but also no loans at all that are SECURED on residential property, because that means if the security gets called in you may accidentally end up owning a piece of residential property.  Even if it never happens, the loan is still not allowed. 

Ditto anything moveable eg if the security for a loan is business assets such as machinery or furniture, or if a business uses the funds to buy machinery or furniture (or anything "moveable" eg vehicles, boats, fine art, gold etc), the entire loan becomes not permitted.

The simplest I have found so far are loans for commercial property, secured on commercial property.  AC have several running at the moment.

Everything else would be on an individual case by case basis. 

If a loan turns out to be used for or secured on a non-permitted investment, or a loan to a company or person connected to the lender, the penalty could be 55% taxation, so it's worth being extra cautious and double-checking all angles before lending.

There was an FT article recently on some TC investors that got burned for 55% tax by lending to a business that ended up using the borrowed funds to buy machinery.

It was hinted that this was the reason TC joined up with SIPPClub, to protect lenders, but this looked more like PR fluff (I would not in any way endorse SIPPclub).

An important thing is that a pension does not participate in blind "auto-invest" type lending where you do not know enough details of what every loan is used for and secured on.

Again, AC's DD and information is usually plenty for this and, if in doubt, the Q&A usually covers it. 

And then the HMRC rules are on their website to double-check, and also look for any rule changes/updates.

[If only investing via your limited company and just putting the profits into your SIPP/SSAS though, as in your original post, then these pension rules do not apply - I just wanted to make sure this bit was not overlooked in the general conversation]