Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
Ministers may consider including residential investment property in self-invested pension schemes (SIPPS) that would lead to a major pension industry shake-up for buy to let landlords.
Representatives of the Royal Institute of Chartered Surveyors (RICS) have met with HM Treasury to discuss the change.
SIPPs allow individuals greater levels of choice over how their money is invested than traditional pension arrangements.
SIPPs act as a pension “wrapper” which leads to tax benefits in return for limited access to the asset and pension holders are able to manage investments themselves or with the support of a manager.
Many SIPPS include owner-occupied business premises and commercial property.
RICS says personal property, including residential buy to lets, arts and antiques, were originally meant to be included in the SIPPS structure. Last minute political changes within the Labour government ruled them out.
Wording of legislation introducing SIPPS allows personal property but subsequent exemption orders exclude the asset class.
The RICS talks with Treasury officials mainly related to including art, antiques and similar personal property in SIPPS – but the changes could easily include residential investment property as well.
RICS claims new valuation standards mean SIPPS could offer a wider range of investment options.
This would be particularly advantageous for buy to let landlords who invested long-term for a pension.
The major change comes from RICS valuers adopting new compliance regulations relating to art and antiques.
Regulations relating to the valuation of arts and antiques are now included in the Red Book and there are growing calls within the sector for all valuers to take account of these rules in order to raise standards.
The Red Book already includes industry-recognised standards for valuing residential property.
Residential investment property is already cleared as an asset for qualifying non-UK pension schemes (QNUPS), which sets a precedent for buy to let landlords in the UK.
QNUPS are a special class of pensions, along with qualifying recognised overseas pensions schemes (QROPS) that allow individuals with UK pension rights who live permanently overseas to transfer funds and assets from Britain in to an offshore pension.
Advice on SIPPs is strictly regulated by the FSA and only a small percentage of advisers are authorised to provide advice. If you would like us to refer you to our recommended advisors please speak to our Customer Care Team on 01603 894525 and ask them to refer you to one of our recommended Independant Financial Advisor’s for a FREE financial review.
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