15:12 PM, 16th March 2017, About 6 years ago 7
I am a private landlord with half a dozen properties in London and no other income beyond the rental income. I never paid much attention to pensions in the past perhaps for obvious reasons.
Last September I started reading up on SIPPs and was moved to take one out with a well known provider. I made my contributions and marveled at the tax relief as it was credited to my SIPP account each month. The stock market continued to show handsome returns although of course it can (and will) go down as well. I felt I had done something really good to supplement my property income during retirement.
All seemed rosey and I felt I had finally caught the goose that lays the golden egg.
As I continued my research on SIPPs and the stock market I kept hearing a phrase to which I paid little attention, but something started to cause it to nag at me deep inside. Eventually I phoned up my SIPP provider and asked them the following question.
“Does buy to let rental income count as qualifying earnings as far as SIPP is concerned?”
You guessed it. The answer was NO. That meant no tax relief which meant the SIPP had become worse than useless as it meant any income drawn from it later would essentially be taxed twice.
The only positive thing was that I can put £3600 into the SIPP each year whether there were qualifying earnings or not. Not much help to me as I had far bigger plans.
I am sure I am not the first B2L landlord to come up against this so I am wondering if there are any other pension scheme possibilities for people in my position that you or your readers are aware of or is it really the case that the property portfolio is my own self invested personal pension.