Not upheld: Other regulated complaint complaint against EBS Pensions Limited

Decision detail

Summary

Mr J complained that EP wrongly refused to fund outstanding architects' fees for a planning application on farmland held within his SIPP after initially agreeing to fund the project. EP changed its position after receiving the architects' report, which stated the house was intended for Mr J and his family, concluding the project was not solely for the SIPP's benefit and posed risks of unauthorised payments and tax penalties. The ombudsman found the complaint not upheld, determining that the architects' report provided reliable evidence of a personal benefit element to the project, meaning it could not legitimately be funded by the SIPP under scheme rules. The ombudsman concluded EP reasonably refused funding to protect the SIPP from planning risks, tax implications, and potential complicity in misleading the planning authority, fulfilling its fiduciary duty to the SIPP.

The Ombudsman's reasoning

The ombudsman concluded that the project was not solely for the benefit of the SIPP because the architects' report clearly indicated the house was intended for Mr J and his family, creating a personal interest element. Even if Mr J intended to purchase the property at market value later, at the time he sought SIPP funding he was asking the SIPP to bear the planning risk for a project that would personally benefit him if successful. The ombudsman found EP was entitled to rely on the architects' report as reliable evidence and was reasonable in refusing to expose the SIPP to planning risks, potential tax penalties, and the risk of being complicit in potentially misleading the planning authority. EP's fiduciary duty to protect the SIPP's interests justified its decision to stop funding.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website