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Casual Observer

Sipps Idiot's Guide

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3.5 Fund not subject to Inheritance tax

Property held within a SIPP should not be subject to Inheritance Tax (“IHT”) on the death of the member.

This is not correct. The Inland Revenue has since announced that it will be acting to substantially diminish or abolish altogether the IHT avoidance possibilites offered by SIPPs.

http://www.businessgazette.co.uk/viewarticle.asp?id=204798

The current wording of the legislation means that the entire contents of your pension plan, including property, could be passed on free of inheritance tax. So if you and your heirs have a SIPP, your heirs would not have to pay IHT on the assets contained in your plan, which, according to the legislation, could include the family home, holiday homes, rental properties, works of art, and even the wine cellar or that classic car.

The Inland Revenue indicated in February that it was looking to close this loophole and that IHT benefits opened up by the new pension rules would be substantially reduced.

http://www.telegraph.co.uk/money/main.jhtm...09/cmsipp09.xml

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Still can't believe what a scam SIPPS are. I'm not sure they'll have massive impacts on the property market as, for most average to moderately high earners, the contribution limit of 100% of salary will mean it will take a few years for most people to stack up enough cash to be able to buy a BTL property and yet only borrow 50% of the SIPP value.

However for very high earners that can stack in 100,000 pounds + in a year (up to 215,000 quid) the scheme is basically a get-rich scam. Especially if you are near retirement.

Makes even the Civil Service pension scheme look poor!

:(

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Still can't believe what a scam SIPPS are. I'm not sure they'll have massive impacts on the property market as, for most average to moderately high earners, the contribution limit of 100% of salary will mean it will take a few years for most people to stack up enough cash to be able to buy a BTL property and yet only borrow 50% of the SIPP value.

However for very high earners that can stack in 100,000 pounds + in a year (up to 215,000 quid) the scheme is basically a get-rich scam. Especially if you are near retirement.

Makes even the Civil Service pension scheme look poor!

:(

What annoys me is not that residential housing can be bought - that's a complete red herring, IMO. The real scandal is that a so-called Labour government is allowing someone on 215k a year to get tax relief on that same amount, if he invests it in a pension. In other words, average earners are subsidising the pensions of the rich.

There should be a cap of say £50k pa, and you can invest it how you like.

Edited by Casual Observer

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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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