SIPPS and Overseas Property

buglawton

Last weeks Telegraph was saying that the Admin costs will match the tax savings. I tthink the best way is to form a SIPPs club/group with several others and each buy a share in a group of properties (diverse portfolio). Pay a good solicitor to arrange the Trusteeship. Could even have a pair of groups who do each others' trusteeship. This is a Govt scheme to benefit those who already have spare wealth.

dunstonh

Quote:
If you were to die, your family would have to have the funds available to buy the property from the pension trustees at full market value.


Surely not? Wouldn't the fund be returned to the family in full on death, like any pension? I'd have thought one of those "in specie" transfers would probably do the trick if the beneficiaries happened to be living in the house at the time.

That is currently an unknown. However, on paper, the pension fund would need to be liquidated before it can be paid to the nominated beneficiary. That would mean the sale of assets (like they would be currently) before the funds to be paid out.

I expect that the release of information in January will clear that up one way or another. Family SIPPs may be the way round this. Indeed, that part of things may very well end up being a big advantage.

But the whole thing is fiendishly complicated and the possibility of major c*ck-ups and confusion looks very high - for some people it's almost certain to end in tears.:(

Spot on. It isnt helped much by articles promoting many of the potential benefits as actual benefits before the full rules have been confirmed.

whiteflag_3

Just been reading an article by Andy Bell who runs Sippdeal ltd ( a sipp provider) who says in his view that ownership of an overseas property through a Sipp willl become so complicated that he is not sure that his company will even offer the option!

He says it is not possible the register a spanish property in the name of a UK trust and hence the majority of SIPPS cannot hold Spanish property directly.

He also outlined the taxes that will be payable by a Sipp with Spanish property

Income tax @25% on any rent
Capital Gains Tax (5% sale price)
Impuesto sobre el Valor Anadido(iva) @7%
Annual wealth Tax ranging between 0.2% and 2.5% of declared value

plus registration fees of between 2 and 4% of the purchase price

Its about time some of the Sunday papers started printing this as well, instead of hyping up a product that in my experience 95% of the public dont even begin to understand.!

ManAtHome

And wouldn't you need to be earning over £125k pa (ish) to get your £40k rebate from the IR.?

whiteflag_3

And wouldn't you need to be earning over £125k pa (ish) to get your £40k rebate from the IR.?

Yes ,there or there about.....................but if you earn that kind of money your probably overpaying your mortgage by 2-3K per month!