Intellectual property in Sipps ‘open to abuse’

Intellectual property in Sipps ‘open to abuse’

The chairman of the Association of Member-Directed Pension Schemes has said it would be best to avoid putting intellectual property in Sipps because of valuation concerns.

Neil MacGillivray, who is also the head of technical support at James Hay, said it was “potentially open to abuse”.

He said: “It is not something James Hay would agree with having. The main issue is valuation because it is a specialist area. I know we can hold it, but it could potentially be open to abuse.

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“From an AMPS point of view it is available as an asset class and it would be up to whoever valued it to justify the valuation was accurate.”

Intellectual property has been a permitted asset class since a wide range of pension reforms were introduced on ‘A-Day’ in April 2006.

Jim Asher, head of valuation at Oxfordshire-based Coller IP Management, said: “Valuing intellectual property does tend to be a specialist area, but it is becoming more widely used and the Intellectual Property Office has got a section on its website which discusses the methodology.

“It is similar to valuing other assets. You take a look at three different things: what it has cost to produce the asset, what the value might be on the open market and what the economic benefit of it might be.”

Earlier this month, it emerged that HM Revenue & Customs was investigating some cases of potential intellectual property overvaluation in self-administered schemes provided by Clifton Asset Management.

A spokesman for the Somerset-based wealth management firm said it had been in correspondence with HMRC about 13 cases – but added that a “larger number” had had protective assessments raised so that HMRC could look at them if it needed to, negating a time limit.