SIPP purchasing property?

[pete12345]

I am thinking on creating a SIPP pension and was wondering if its allowed to purchase residential property so that I can rent it out?

 

[MikeJ]

No, just commercial property I think.

 

[David Griffiths]

It might be possible for a SIPP to indirectly invest in residential property through a collective investment like a unit trust or something similar. It can't purchase residential property directly.

The other obstacle is that the SIPP will only be able to borrow up to half of its current value. If it's a new SIPP unless you transfer in from other funds the odds are that you can only pay in £50k in a tax year. That would mean than you can borrow £25k and buy a £75k property. If you can rush it through by 5 April you might be able to get £100k in and buy a £150k property. That's if you've got £100k lying around and are actually able to pay in the full allowance.

 

[MikeJ]

Can't you pay in previous year's allowances also, providing you've not used them?

 

[doi_swilkinson]

Hi
There is a way of doing it , if you have an existing pension.

Regards

Stefan

 

[Chase]

Have a look on You tube. Search for chasegoldmanltd

 

[David Griffiths]

Can't you pay in previous year's allowances also, providing you've not used them?

Yes, but only if there was a pension plan in existence in that year that you could have paid into, but didn't. I don't think it has to be the same plan as the SIPP - expert advice needed on that.

You can't start a new plan in 2011-12 and use unused allowances for 2010-11

 

[SIPPclub]

I am thinking on creating a SIPP pension and was wondering if its allowed to purchase residential property so that I can rent it out?

A SIPP can't directly hold residential property, but a SIPP can lend money to fund any form of residential property project. The interest rate is negotiated between the SIPP lender and the property developer. The SIPP gets a regular, good level of interest that's tax free when it arrives in the SIPP. And the property borrower gets the money they need for their project. The only restriction is you can't lend money from your own SIPP for your own property projects. But friends can do it, or you could raise money from successful and influential people from SIPPclub.