| | | Wine, art and classic cars in your Sipps pension
Cars and fine wines are set to be held in pensions writes Melanie Wright of The Telegraph. 1000s of investors are waiting for more information on the new pension rules that are set to come into effect on April 6 th 2006. From that date a wide range of investments could be held in pensions including residential property, art and even racehorses. Self invested personal pensions (Sipps) are currently popular with investors who want to exert control over there own pensions. The trouble with the current regulation is that the assets that people can invest in are severely limited and do not give real choice . The complete tax treatment of the new pension reforms is yet to be finalised by HM Revenue and Customs but more details are expected within the next month or so. Experts are predicting that as many as 6 million people will have a Sipps Pension by 2020. From April 6 th next year (2006) it will be possible to pay in up to 100% of your income into a Sipp with a maximum limit set at £215,000. The Sipp Fund will have a maximum value of £1.5 million and if the funds value exceeds this its assists look set to be taxed at 55%. Research has shown that 52,000 people want to buy a property with a Sipp pension and the current projection is that over £10 billion worth of property called be sold in the aftermath of A-Day. On of the key features of a Sipp pension is the tax angle. Any assets that are purchased by the Sipps Fund can be offset against income tax. In reality this means that a higher rate tax payer will only be paying £120,000 for a £200,000 property. A lower rate tax payer will be paying £156,000 for the same property. Investors considering holding property within a Sipp must act with caution. Stewart Ritchie, pensions development director at Scottish Equitable, said: "For most people, the risk of over-investment is enormous. This is compounded if you add in the extra complexity of overseas property purchase. Advisers should make sure their clients are fully aware of the risks involved." |
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