SIPPs - PENSIONS AND PROPERTY INVESTMENT

What is a SIPP? What can I use it for?

SIPP stands for Self Invested Personal Pension, and they are a way to buy property with all the tax advantages of a pension. For example, if you use your SIPP to a property, which can be in the UK, or an investment property abroad, you own the SIPP, the SIPP owns the property.

Take Control Of Your Own Pension

A SIPP is a self invested pension plan, instead of investing through under performing pension funds etc you can take control of your pension yourself. After April 2006, ‘A’ Day, you choose where your pension funds are invested, so you can use your SIPP to invest in property - buying a second home, buy to lets or even property abroad.

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.

» Part Two - When Can You Have One