Property in SIPPS and loans

Pal

Re: this question:

deepee wrote:

4. If you already own a Property worth 50,000,
and you have 50,000 or more in Pension Funds but not cash,
can you lend your Pension Fund 50,000 and to transfrer the Property
to transfer to it and pay you the money when Pension Fund is sold.

Under the new rules, you will be able to pay up to your annual income into a pension fund and get tax relief on it up to £200k or so. So you could borrow the £50k from a bank, pay it into the pension fund. The next day you could get the fund to buy your property off you for £50k plus the interest payments, which you then use to repay the bank loan.

The obvious problem is that most properties are worth more than £50k! (Around £150k might be a good start) and most people do not earn that much, so you would have to borrow over two or more tax years. The pension fund can also borrow up to 50% of its value whether it is in cash or not so that might help, but in the end the numbers are too large for most people to be able to make use of.

Personally I think that the rules on residential property in SIPPS are not going to be flexible enough to make this a goer for the vast majority of people, but we shall see.

DavidLaGuardia

deepee wrote: »

Some questions on this Subject.
5. Can you you Jointly own the House with your Pension Fund.

Assuming House meaning commerical property
Someone answered no to this question which is strictly correct. You cannot be JOINT owners. If you meant can you share in the ownerhip of a property with your pension the answer is yes. Joint ownership means that legal title for the whole poperty is held by all the parties (on death of one ownershiop is convered on survivor(s). Tenants in Common is where a defined share is owned (in the case of death this passes to a persions estate not the other owner) To avoid conflicts, Many SIPPs will not permit property to be co-owned, but there arer shcemes that do