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Property in Pensions
The ability to put Commercial Property into a SIPP has been
one of the key drivers in making SIPPs so popular over the
last few years, particularly among professional partnerships
such as Accountants, Dentists, Doctors, etc.
After ‘A’ Day, in April 2006, when the new
pension regulations are published, as well as direct
investment in commercial property and commercial property
funds which are currently permitted, it will also be
possible to invest in certain specialist residential
property funds. The Treasury also intends to announce
the yet to be launched Real Estate Investment Trust (Reits).
For further details contact your adviser.
Some of the key attractions of putting property into your SIPP are:-
- Currently, it is possible to get a 50% mortgage against
the value of your fund when purchasing a property within
a SIPP. For example, if you have a fund of £100,000, you
could get a mortgage of £50,000, enabling you to convert
this to cash and buy a property of £150,000.
- All legal costs and expenses are payable from the SIPP.
- No Capital Gains tax is payable on gains on the disposal of a property held in a SIPP.
- No limit on the number of properties which can be purchased within a SIPP (providing contribution and mortgage limits are not exceeded).
- VAT on improvements to a property is reclaimable by the SIPP.
- Pensions payable from any rental income.
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