Gordon Brown, the chancellor, announced in his pre-budget report last month that moveable assets and personal chattels, which had until then been expected to be admissible Sipp investments, would not qualify when the new regime comes in on April 6.
However, the Revenue will not at this stage confirm whether physical holdings of bullion are affected by this change. A spokesman said: “We’re aiming to publish draft legislation and draft guidance, which will include examples, in good time before the 2006 finance bill is introduced.”
Pension specialists are cautiously optimistic about the chances of gold investors being offered a reprieve.
Tom McPhail of Hargreaves Lansdown, an adviser, said: “No decision has yet been taken on whether to allow gold to be held within Sipps. Our feeling is that gold jewellery and the like won’t be allowed, but that properly stored gold bullion will be. However, until the government makes an announcement on this, we won’t be accepting physical gold of any kind into the Sipps we manage.”
Thousands of investors who had been gearing up to hold esoteric investments such as fine wine, vintage cars, racehorses and works of art within their Sipps were left stunned when Brown announced the change late last year.
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However, while advisers and Sipp providers slammed Brown for changing his mind so late, many admitted they felt he was right to exclude “exotic” assets.
John Lawson of Standard Life said: “There were sound reasons for including residential property in Sipps, but we felt that allowing investors to hold assets that had a personal use was a dangerous concept.”
Gold bullion is a tried-and-tested investment, though, and the price of the world’s oldest precious metal has soared recently. Last year alone it jumped by more than 18% and this month it hit a 25-year high.
Analysts also believe there is more to come. GFMS, a London-based research group, recently predicted that the gold price — now $559 — could reach $850 in 18 months, while Fat Prophets, a consultant, thinks it may hit $700 this year.
If Labour allows bullion to be held in Sipps, you will be able to buy it through a London merchant such as Gold Investments, Baird & Co or ATS Bullion, although large quantities can be costly to store and insure.
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You can invest in shares through a Sipp, so gold bullion securities — shares that are traded on the London Stock Exchange and move roughly in line with the gold price — will be possible even if bullion bars and coins are excluded.
The set-up costs are 0.1%, the annual charge is 0.4% and one share is equivalent to a tenth of a troy ounce of gold. So if the gold price is $550, each share is worth about $55. And the metal is held by HSBC, so you don’t have to worry about storage and insurance.
McPhail said: “This would be a logical way for someone wanting to get exposure to gold to invest within a Sipp if bullion is vetoed. We certainly can’t see any reason why it wouldn’t be allowed.”
Visit the World Gold Council website (gold.org) for more information about investing in gold.