Her Majesty's Revenue and Customs (HMRC) is investigating the "aggressive promotion" of using intellectual property (IP) to borrow money from small self-administered pension schemes (SSAS).
Rupert Curtis, managing director of SIPP provider Curtis Banks, said: "HMRC is looking at the more aggressive areas of IP and SSAS promotion and firms are under investigation."
The Revenue's Special Compliance Office (SCO), which investigates cases where substantial tax is at risk or where fraud is suspected, is understood to be looking into the practice.
Some advice firms are recommending clients who own businesses to use their IP as collateral to borrow from their SSAS. However, there are fears the IP is then being overvalued.
Sources have said that, in many cases, the client's IP is the company's own branding and, therefore, unsuitable as a loan security.
Simon Goldthorpe, director of Beaufort Asset Management, said: "The IP is potentially worthless if the company ceases to exist. It can only be bona fide in a recognised company that possibly has true brand value as well.
"The acid test must be ‘could be sold separately'. Unless the IP has a stand-alone value then it is tantamount to fraud to use it in this way."
Advisory firms are convincing business owner clients to use their IP as collateral because usually they have already used the rest of their assets such as commercial property to secure credit from banks, sources said.
There are also fears that businesses are being mis-sold expensive SSAS, costing up to £20,000 in fees, in order to access the loanback facility, when in fact they would be more suited to a £500 SIPP.
The news comes after Stephen Soper, executive director for defined benefit (DB) at The Pensions Regulator, warned against using a brand as an asset or as a security for a loan.
"It can be particularly difficult to value some asset classes such as brands," said Soper in a speech at the January National Association of Pension Funds (NAPF) trustee conference.
"Should it prove necessary to realise assets that are closely related to the employer, this will often be against a background of difficult trading conditions or even the employer's insolvency.
"In such a scenario, the value of the asset to the scheme may quickly fall, and, ultimately, could prove worthless."
A Financial Services Authority spokesperson said the regulator is not looking into advice on IP and SSAS.
HMRC has declined to comment.
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