Annuity v Buy to Let

JohnCelt

I would like to purchase a buy to let property rather than an annuity. To do this however I would require virtually all of my pension.
I understand that I can only take 25% of the value tax free. Is there any way I can use the full value of my penion to buy the property without paying tax at that point?
Obviously I would subesquently be paying tax on the income I receive in rent.
Any advice would be appreciated.

mania112

No, using a pension to buy a residential property for Buy to Let (or to live in yourself for that matter) is not possible - besides the 25% tax free cash, which you can use to do with what you want.

After 25% is paid from an Annuity or Income Drawdown, you are then limited to annual income limits - which means to say, you cannot withdraw 100% of the fund into cash.

The only time that can sometimes be possible is if you suffer from a Terminal Illness.

gadgetmind

Commercial property or residential? The former is easy to hold in a SIPP but the latter *very* difficult and it's unlikely you'll find the way you have to do this acceptable.

Have you considered using the PCLS as a deposit on a BTL and using drawdown for the rest of your pension?

This will give you a far more sensible asset allocation though will involved gearing.

It's not something I'd do, but neither is BTL full stop as I regard it as far too much like working for a living!

gadgetmind

mania112 wrote: »

The only time that can sometimes be possible is if you suffer from a Terminal Illness.

Or if you know how to use SSAS and offshore trust tricks as well as a certain ex MP who got us into the current mess.

atush

Not to mention you are leaving out a thrid option- you don't have to buy an annuity, you can use Drawdown where your money remains invested (and can be inherited) and draw an income from it.

Annuities are no longer comnpulsory.