By Edward Lander

LONDON (Citywire) - SIPP providers are withdrawing their in-specie contribution facilities following an Inland Revenue ruling that would make the transfers too risky.

Suffolk Life has withdrawn the facility in the last week and other providers are expected to do so in the coming weeks.

Changes introduced after A-Day have allowed people to pay contributions in kind such as property, shares and the contents of ISA portfolios directly into SIPP or SSAS schemes.

In-specie contributions remove the need for assets to be sold and then repurchased within the chosen pension wrapper.

John Moret, director of sales and marketing at Suffolk Life, said the ability to make in-specie contributions allows SIPP and SSAS owners with substantial holdings in assets but little readily available cash to contribute to their pension.

He added that moving assets into a pension over a number of years could also reduce capital gains tax liabilities.

In order to make an in-specie contribution the investor has to promise to pay contributions in credit by creating a debt in advance of the transfer to the value of the assets being transferred.

But there is a risk that the assets may lose during the time taken to process the contribution.