Sipp Tax benefits

As with all personal pensions the SIPP provides tax benefits to policyholders:

• Your contributions to a SIPP attract tax relief at your highest rate. This tax relief is automatically added when you contribute to your pension.
  
  If you are a basic rate or non-tax payer this means that you will receive 22% tax relief on all premiums up to your annual limit. This means that for every £78.00 you pay, your pension policy receives £100.00. Higher rate tax payers benefit from the 22% tax relief on payment of a premium and can claim an additional 18% tax relief via their end of year tax return.
  
• Your employer can make contributions to your SIPP gross of income tax. These contributions will usually be considered a business expense and attract relief from corporation tax
• Investments within your SIPP can grow free of income and capital gains tax (though dividends from UK shares are not tax-free)
• At retirement you can usually take up to 25% of your SIPP as a tax-free lump sum
• If you die before taking benefits, your beneficiaries will not normally have to pay inheritance tax on any money they receive from your SIPP (although it will be subject to 35% tax)