SIPPS and residential property
Discussion
You will have to have sufficient funds in the SIPP to buy the property, unless you own it outright already. Maximum funding available is going to be 50%, ie if you have £100k in the pot you can borrow £50k on top to buy a property valued at £150k.
Three occurence next April is called A-Day and it is part of the governments simplification of pensions by making everything a lot more complicated.
I would seek advice from an IFA/pensions specialists before you go too far down this road as there are lots of considerations.
However they are massively increasing opportunities for investment through SIPPs. You could even consider putting classic cars or your wine collection in. Various trustees will also consider overseas off-plan property investment.
Three occurence next April is called A-Day and it is part of the governments simplification of pensions by making everything a lot more complicated.
I would seek advice from an IFA/pensions specialists before you go too far down this road as there are lots of considerations.
However they are massively increasing opportunities for investment through SIPPs. You could even consider putting classic cars or your wine collection in. Various trustees will also consider overseas off-plan property investment.
It's not just SIPPs all pensions will be able to invest in residential property after A day.
Just be wary of putting all your pensiosn eggs into one thing, likely in many cases given the large capital outlay required. If you then suffer from a crash in residential property markets could be very detrimental.
Also as regards the amount available to invest up to your annual salary per annum if you have the funds available post A-day.
Just be wary of putting all your pensiosn eggs into one thing, likely in many cases given the large capital outlay required. If you then suffer from a crash in residential property markets could be very detrimental.
Also as regards the amount available to invest up to your annual salary per annum if you have the funds available post A-day.
I'm a little confused.I read on www.SIPPS2006.com that you can invest your yearly income as Ellroy has also said. Then someone at work said its only 15ish%.
Can anybody clarify?
Many thanks
Deep
Can anybody clarify?
Many thanks
Deep
Has yet to be confirmed but should be possible to contribute any amount into pension fund. However, you will only receive tax relief on contributions up to the value of your taxable income. E.g. if you earn £20k and are taxed on £20k then you can put £20k in the pot and receive relief on that contribution. Anything over this will not attract any immediate relief but will grow and return free from CGT or income tax.
Make sure fund doesnt exceed limits (likely to be £1.4m) or 50% penalty tax imposed! Hope this helps, but would really talk to an IFA about it if it is a consideration for you.
BTW this will pretty much affect all pensions next year, not just SIPPS!
Make sure fund doesnt exceed limits (likely to be £1.4m) or 50% penalty tax imposed! Hope this helps, but would really talk to an IFA about it if it is a consideration for you.
BTW this will pretty much affect all pensions next year, not just SIPPS!
The limit (lifetime allowance) will be £1.5m for 06/07. Indexed thereafter. Effective tax rate above £1.5m is 55% (made up of normal 40% tax plus 25% recovery charge). Up to 25% of the fund (max 25% of £1.5m) can be taken as tax free cash at retirement.
Annual contribution limit is lower of 100% of earnings and 215K (indexed after 06/07), except that this limit does not apply in the year of retirement, which means that some people will be able to defer taking earnings in their final year of work and instead pay it into their pension and take 25% tax free when they retire.
This is a simple summary. The Revenue are still refining the details.
Annual contribution limit is lower of 100% of earnings and 215K (indexed after 06/07), except that this limit does not apply in the year of retirement, which means that some people will be able to defer taking earnings in their final year of work and instead pay it into their pension and take 25% tax free when they retire.
This is a simple summary. The Revenue are still refining the details.
Could be the person at work is referring to current contributions allowable if you are a member of work pension scheme, 15%.
At present if not a member of occupational pension then amount depends on age and earnings. From 17.5% at under 35 to 40% at 61, assuming personal pension and not retirement annuity contract which has slightly different limits. Also there is an earnings cap for personal pensions of £105,600.
As of A day all will change up to your salary in one year as a contribution irrespective of pension types. Effectively one set of rules.
At present if not a member of occupational pension then amount depends on age and earnings. From 17.5% at under 35 to 40% at 61, assuming personal pension and not retirement annuity contract which has slightly different limits. Also there is an earnings cap for personal pensions of £105,600.
As of A day all will change up to your salary in one year as a contribution irrespective of pension types. Effectively one set of rules.
Not wishing to be a party pooper but... Past performance is not an indicator for future performance...... Plenty of sheep were in the market driving it up but sentiment is changing....
Take a sneaky peek at www.housepricecrash.co.uk
Take a sneaky peek at www.housepricecrash.co.uk
aceparts_com said:
Not wishing to be a party pooper but... Past performance is not an indicator for future performance...... Plenty of sheep were in the market driving it up but sentiment is changing....
Take a sneaky peek at www.housepricecrash.co.uk
Now I've not looked at the link but the website name is hinting ever so slightly that its not an impartial site.
Ace,no party to poop mate. Property price does'nt need to rise for SIPPS to make alot of sense if you have plenty of cash and are being taxed at 40%. Especially so if you are not prepared to put your swag into stock related funds.
I d'ont think anybody considering putting residential property into a SIPPS is hoping for major capital rises but wants to avoid paying 40% tax and 40% CGT.
Deep
I d'ont think anybody considering putting residential property into a SIPPS is hoping for major capital rises but wants to avoid paying 40% tax and 40% CGT.
Deep
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