SIPP's & CGT

David.s_2

I understand that gains in pension funds are not subject to Capital Gains Tax (although tax on Company dividends cannot be claimed back).
If I buy a property with my SIPP and then sell it making a capital gain, is it subject to inflation tax oops I mean CGT!!
It is also allowed to borrow half the value of the SIPP, I think, which could help with a speculative investment of this kind. Safe as houses. Am I getting carried away?

Daniel54

I assume you are aware that you can only put commercial property into a SIPP.Residential property is not allowed

jamesd

There is no CGT on property in a SIPP either. two significant restrictions:

1. No residential property except some types of large community student scheme.
2. No direct tangible movable object ownership. Which means no wine, cars, art or anything else that you can move around easily.

kidmugsy

jamesd wrote: »

2. No direct tangible movable object ownership. Which means no wine, cars, art or anything else that you can move around easily.

Nor slow horses nor fast women: we are ruled by puritans.

coyrls

David.s wrote: »

I understand that gains in pension funds are not subject to Capital Gains Tax (although tax on Company dividends cannot be claimed back).

There is no tax on company dividends to claim back.

David.s_2

Thank you for your comments. So, I could buy a commercial property like a shop and rent it out. Later sell it. No CGT to pay, no tax on the rent or any other profit which would not be considered as part of my income, expenses would be deductible. That's a business in a pension wrapper. Anyone tried it?

jamesd

kidmugsy wrote: »

Nor slow horses nor fast women: we are ruled by puritans.

I think that there might be some other issues trying to put fast women into your SIPP. Among other problems, obtaining a valid title may be difficult. Maybe commercial premises for them might be permissible in some jurisdictions, though I think none in the UK. Stick to the horses, less money to be lost that way.

jamesd

David.s wrote: »

Thank you for your comments. So, I could buy a commercial property like a shop and rent it out. Later sell it. No CGT to pay, no tax on the rent or any other profit which would not be considered as part of my income, expenses would be deductible. That's a business in a pension wrapper. Anyone tried it?

Right, that's fine. It's quite common for business owners to do it for property used by the business then have the business pay the rent to their SIPP.

David.s_2

How very interesting jamesd. Where is the line on residential property I wonder? If I invest in shares of a residential property company that would just be an investment in a company. OK? If I rent out a flat to 3 students sharing, clearly a business deal, that not be ok? If I formed a company to let out the flat??

jamesd

Just read PTM125200. The unauthorised payments charge it refers to is 55%.

David.s_2

Yes, sobering. The formal document PTM125200 certainly spells it out. Just shows how chit chat can lead a person astray.