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http://www.timesonline.co.uk/article/0,,2-1806025,00.html

http://www.timesonline.co.uk/article/0,,542-1805780,00.html

The Treasury published plans yesterday to allow the Financial Services Authority (FSA) to regulate Sipps, which would give consumers access to various safety schemes designed to protect them against unscrupulous salesmen. The move came after the Government was criticised fiercely for bringing in the new rules without ensuring that regulation was in place.

The FSA admitted that it would be at least April 2007 before any rules are in place to safeguard savers’ pensions.

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The Times is saying in a number of articles that:

A higher-rate taxpayer buying a £100,000 property through the scheme would receive a £23,000 rebate and a further £28,000 into the SIPP, making a total of £51,000 in tax breaks on the purchase.

Can anyone make these figures stack up – even roughly in round numbers? :unsure:

I'm still trying to understand these SIPPS but can't even make the basic figures work ... always end up with, per 100k SIPP assets - 78k contribution, 22k tax refund into SIPP (total 100=78+22), personal tax refund 30k, hence cost per 100k asset is 78-30 = 48k.

Edit: This SIPPS Guide seems quite good

http://www.trustnet.com/help/sipp/?print=y

but then I can't quite make their example (taxation paragraph) work either ...

per 1000k SIPP, 780k contribution, 220k refund into SIPP (yes!), but (180k=them, 300k=me) personal refund.

Edited by spline

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The Times is saying in a number of articles that:

A higher-rate taxpayer buying a £100,000 property through the scheme would receive a £23,000 rebate and a further £28,000 into the SIPP, making a total of £51,000 in tax breaks on the purchase.

Can anyone make these figures stack up – even roughly in round numbers? :unsure:

I'm still trying to understand these SIPPS but can't even make the basic figures work ... always end up with, per 100k SIPP assets - 78k contribution, 22k tax refund into SIPP (total 100=78+22), personal tax refund 30k, hence cost per 100k asset is 78-30 = 48k.

Edit: This SIPPS Guide is good

http://www.trustnet.com/help/sipp/?print=y

but then I can't quite make their example (taxation paragraph) work either ...

per 1000k SIPP, 780k contribution, 220k refund into SIPP (yes!), but (180k=them, 300k=me) personal refund.

Its quite simple, at the moment your pension contributions from your salary are taken out of your gross salary so its effectively like saying for every 78p you put in the Government puts in a further 22p, for higher tax payers which charge 40% tax they get a furhter rebate on you tax return of 18p to make the 40p contribution buy the Government.

When you retire you end up paying tax on your pension income anyway, can't see what all the fuss is about.

Edited by Dicky

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Think the extra may be coming from relief on the mortgage payments within the sipp.

Not sure on this but someone maybe able to correct me if I'm wrong.

D

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Its quite simple, at the moment your pension contributions from your salary are taken out of your gross salary so its effectively like saying for every 78p you put in the Government puts in a further 22p, for higher tax payers which charge 40% tax they get a furhter rebate on you tax return of 18p to make the 40p contribution buy the Government.

Cheers Dicky - but the problem then is that the total rebate is only 18+22=40p per 100p of asset, but the Times is saying 51p. This x2.08 multiplication of contributions into assets (which admittedly will be taxed later) seems quite an important element of the way SIPPs are set up, especially when further leveraged by the borrowing allowed within the SIPP. The interesting thing is that the SIPP can buy a house and let it back you at a low ‘rent’ to cover the repayments.

EDIT: I think this Times 52p thing is wrong - your figure is obviously right.

Edit: discussion moved to this thread - attempt to prevent fragmentation of the discussion about how SIPPS work

http://www.housepricecrash.co.uk/forum/ind...60entry203360

Edited by spline

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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