Buying Investment Property with a SIPP
What are they?
Self Invested Personal Pensions - SIPP
A way to buy property with all the tax advantages of a pension. You buy an investment property or holiday home which can be in the UK, or an investment property abroad and
You own the SIPP, the SIPP owns the property.
• A SIPP is a Self Invested Personal Pension
• After April 2006, ‘A’ Day, you choose where your pension funds are invested
• Your SIPP can own second properties, buy to lets and property abroad
• It can even take out a mortgage
• You can think of your SIPP as a Property Pension
Plan
Why have a SIPP?
- Make use of existing Pension Funds
- Buy property at up to a 40% discount
- You chose your income when you Retire
- No need to buy an annuity on Retirement
- You get tax relief, at up to 40%, if you pay into your SIPP
- Rental income is tax free
- When your SIPP sells property there is no Capital Gains Tax
- Your SIPP does not die with you; the funds can go to your family
- And since the property is not part of your estate you pay less IHT
Should you have one?
Yes, if you are buying property as a long term investment.
No, if you are buying for a short term investment, and want to sell up and spend the money in a few years.
Remember, the SIPP owns the Property –, You own the SIPP
When can I start one?
Right Now!
How can I start one?
- Transfer in existing pension funds
- Pay in lump sums or monthly amounts
If you want one, start it now. Next year will be frantic, so if you put it off, your investment property purchase may be delayed
When can I buy Property?
- You can buy Commercial Property now
- Residential Property from 6th April 2006
- UK Property 6th April 2006
Property Abroad may take a little longer, legally you can buy Abroad 6th April 2006. However, the infrastructure has to be put in place.
What should you do now?
• The first thing to do is to consolidate your old pensions.
Consolidating your pension funds takes a long time, so start now
• They will then be in one place so you are ready to buy property
• You can save money now as your pension charges will normally reduce
• It is tidier and less confusing to have just one pension fund
• You can also pay in monthly amounts or lump sums and get full tax relief
• Take expert advice now so you understand what you need to do
• Then your SIPP can buy property from A Day, 6th April 2006
What else do you need to know?
LOTS!
This is just a brief overview, but don’t panic, we will answer all your questions
If you want more information:
The points outlined above are a a generalised and condensed overview of how SIPPS can be of benefit when planning your investments and should not be taken as investment advice.
Click here to register for a free investment property and SIPPs seminar near you from investment property experts and market leading independent IFA’s You owe it to yourself and your family to find out more.
|
