Sipp Slowly

1st July 2005

T. Wyn Jones

The new style Self-Invested Personal Pension (SIPP) will result in significant changes following alterations to be made to legislation from the spring of 2006. The complexity of the private pension provision is seen as a considerable obstacle, and legislation effective from April 2006 should make matters significantly simpler. Additional acceptable investments from this time into a self-invested pension scheme will include residential properties, overseas properties, holiday homes, agricultural land, works of art and even classic cars.

The new style Self-Invested Personal Pension Scheme allows a member to deal with his or her own Income Tax, Capital Gains, Inheritance Tax and Family Wealth Planning. No longer will a pension be something that you become interested in close to retirement and that ultimately dies with you.

Under the term ‘Pension Simplification’ (and about time too) people will have a greater say in the management of their pension while still, of course, using professional advice as appropriate. Those with existing pension funds can release these to purchase another residence, purchase a property for their children to occupy or even purchase a villa abroad. It can also be used to release equity by purchasing your own home.

It is considered by many that the impact of the new legislation will have a positive effect on the property market in 2006 as people seek to change the way they hold their residential property to take full advantage of the tax concessions on offer. But it all seems too good to be true does it not?

No doubt the goal posts will be moved more than once before the 2006 deadline but if half of what is currently muted comes to pass we may see a significant change in property ownership in the UK.

Watch this space!