Taxable property includes residential property and almost all 'tangible moveable property' and if a pension scheme invests in this, an unauthorised payment could arise. This would apply regardless of whether the scheme invested directly or indirectly.
Stewart Dick, head of sales at Hornbuckle Mitchell, said: "Since April 2006, there is no longer a list of permitted investments for pension schemes, so in theory a Sipp or SSAS can invest in any asset. However, certain investments are classed as 'taxable property' and can lead to tax charges as high as 70 per cent of market value of the interest we acquire in the asset."

Mr Dick said as Hornbuckle Mitchell were co-trustees of the pension scheme, it did not allow investors in Sipps or SSAS schemes to make investments in 'taxable property' where there was a significant risk of unauthorised charges being imposed by HMRC.
He said: "Broadly speaking we classify investments in two categories; standard investments and all other. The former are those that are FSA-regulated or traded on a recognised exchange or market. For the latter we undertake additional checks before we will accept those.
"We work closely with advisers to make sure that they are aware of whether an investment is eligible or not, ensuring that the best interests of the member of the scheme are protected, even if they are different to their best interests personally outside the pension."