IPS Self Invested Personal Pension Plan (PO-6283)

Complaint summary

Mr Darlaston complains that IPS failed to keep accurate records of three overseas property investment deposits held in the SIPP and consequently overvalued the SIPP fund for the purposes of calculating the retirement benefits available to him. He alleges that IPS:

• incorrectly treated the £70,000 which he paid into the SIPP in March 2007 as a personal contribution instead of a partial payment to cover the cost (£110,799) of assigning the SIPP interest in one of the properties to him;
• subsequently claimed income tax relief of £19,744 on this payment by mistake;
• effectively loaned him £40,799 from the SIPP (without any interest due) until he paid this amount into the SIPP some seven years later;
• failed to notify him at any time that he had to repay this “loan”;
• overpaid the amount of tax free cash available to him from the SIPP by £20,031 in April 2008 which HM Revenue and Customs (HMRC) will treat as an unauthorised payment if it is not repaid;
• failed to carry out his request to transfer the residual SIPP fund to Hargreaves Lansdown on a timely basis; and
• has generally provided a substandard service dealing with this matter.

Summary of the Ombudsman’s Determination and reasons

The complaint should not be upheld against IPS because they have offered Mr Darlaston an equitable compensation package to address the financial loss to him as a consequence of their mistakes administering the SIPP which clearly constitute maladministration on their part. They are also entitled to seek recovery of the overpaid tax free cash for reinvestment in the SIPP from Mr Darlaston in the circumstances.