737 Posted November 3, 2005 Share Posted November 3, 2005 A couple of weeks ago I wrote twice to my local MP regarding residential property being allowed into SIPPs "Dear Kali Mountford," it began "Regarding Mr. Brown’s introduction of residential property into SIPPs. I am all for flexible pension schemes which can incorporate various types of asset, but I must object to a scheme which allows investment into housing, a fundamental asset that we all need, and of which this scheme effectively gives a discount of 40% on the purchase price of residential property to the already seriously wealthy. These people do not need that 40% tax break as much as the young first time buyers who are usually in the 22% tax bracket, and, let's face it, the treasury do not give a 22% rebates on mortgage repayments to them anymore! Even your government says that property is beyond the reach of most young people and in our area the average price of a property is now 5.8 times the average wage - truly unaffordable for most workers in our constituency. Why on earth then risk forcing up prices even further with the introduction of this pension rule change? By the way, I have several friends with children in their twenties, most are skilled and hard working but are now unable to afford to purchase a home for themselves and families in any decent part of Huddersfield. This new SIPP rule, which allows the wealthy to buy up property at a discount ,whilst they have to rent,is, I can assure you, annoying them and most of their friends in similar positions. I would love to hear your comments on this matter and indeed, whether you support it." Amazingly I have recieved a reply from her office, though albeit only one line. "We will reply fully in due course" it succinctly said! And I'm sure she will, but no doubt only after the legislation has been passed! However I shall keep you informed. P.S. Miz Mountford is a backbencher with no busy parlimentary duties. In her 8 years in the commons she has never spoken or voted against the Government. P.P.S I'm not a 'blue rinser', would never vote Tory again and once actully carried the Labour party card! Quote Link to comment Share on other sites More sharing options...
Leodhasach Posted November 3, 2005 Share Posted November 3, 2005 I wrote to my local (Tory) MP on the issue. In a surprising burst of honesty, he replied and admitted that he didn't know very much about it (he's a fairly typical shires Tory toff, not burdened with too much intelligence), and had passed it on to Malcolm Rifkind as he was the pensions spokesman. He pretty much gave some unspecific fluff about "giving as many people as possible the chance to own their own home in rural areas", but had not much to say about the morality of the very wealthy getting a tax break to buy homes - he is a tory after all. Quote Link to comment Share on other sites More sharing options...
Mushroom Posted November 3, 2005 Share Posted November 3, 2005 What would you expect from the majority of MPs, irrespective of Party? They are on the gravytrain. Quote Link to comment Share on other sites More sharing options...
zuzuspetals Posted November 3, 2005 Share Posted November 3, 2005 I also wrote to my MP about SIPPS, who, to his credit gave me a reply within 48 hours. (Via www.writetothem.com) In my email I quoted some figures from a Times article along the lines of a higher-rate taxpayer buying a £100,000 property through a SIPP receiving a £23,000 refund personally and a further £28,000 refund into the SIPP, making a total rebate of £51,000. Thank you for your email about the implications of the changes to the rules for Self Invested Personal Pensions as of April 2006. I share your unhappiness about some aspects of the new rules. However, I do not believe that the problem lies with allowing residential property to be given the same status as commercial property in SIPPS. The problem lies with the much wider issue of higher rate tax relief, and other tax exemptions, on pension fund contributions. The figures quoted in the article to which you refer give a slightly misleading impression as they ignore the many detailed restrictions on the use of SIPPS and the considerable costs in establishing and managing these funds. It should also be recognised that there is an advantage in encouraging extremely wealthy people to reinvest their wealth within the United Kingdom rather than allowing this kind of wealthy to simply leak overseas. Having said that, there is no question that the affordability of property for first time buyers is an extremely important issue at the moment. The Government's plans to increase the supply of affordable housing, to introduce new shared ownership schemes and to maintain a low interest rate policy will help to alleviate the current difficulties. I am not yet convinced that the use of SIPPS for residential property purchases will automatically impact on the cost or availability of affordable housing for purchase. However, the first year of the operation of the new rules will need to be monitored extremely carefully. I shall have no hesitation in raising this matter in the House of Commons, and proposing changes to the rules, if there is the slightest evidence that the new rules on SIPPS are impacting adversely on first time buyers. Thank you for writing to me on this matter. I also wrote to my MP about SIPPS, who, to his credit gave me a reply within 48 hours. (Via www.writetothem.com) In my email I quoted some figures from a Times article along the lines of a higher-rate taxpayer buying a £100,000 property through a SIPP receiving a £23,000 refund personally and a further £28,000 refund into the SIPP, making a total rebate of £51,000. The reply was as follows and it gave me some food for thought. Thank you for your email about the implications of the changes to the rules for Self Invested Personal Pensions as of April 2006. I share your unhappiness about some aspects of the new rules. However, I do not believe that the problem lies with allowing residential property to be given the same status as commercial property in SIPPS. The problem lies with the much wider issue of higher rate tax relief, and other tax exemptions, on pension fund contributions. The figures quoted in the article to which you refer give a slightly misleading impression as they ignore the many detailed restrictions on the use of SIPPS and the considerable costs in establishing and managing these funds. It should also be recognised that there is an advantage in encouraging extremely wealthy people to reinvest their wealth within the United Kingdom rather than allowing this kind of wealthy to simply leak overseas. Having said that, there is no question that the affordability of property for first time buyers is an extremely important issue at the moment. The Government's plans to increase the supply of affordable housing, to introduce new shared ownership schemes and to maintain a low interest rate policy will help to alleviate the current difficulties. I am not yet convinced that the use of SIPPS for residential property purchases will automatically impact on the cost or availability of affordable housing for purchase. However, the first year of the operation of the new rules will need to be monitored extremely carefully. I shall have no hesitation in raising this matter in the House of Commons, and proposing changes to the rules, if there is the slightest evidence that the new rules on SIPPS are impacting adversely on first time buyers. Thank you for writing to me on this matter. Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted November 3, 2005 Share Posted November 3, 2005 The problem lies with the much wider issue of higher rate tax relief, and other tax exemptions, on pension fund contributions. ...It should also be recognised that there is an advantage in encouraging extremely wealthy people to reinvest their wealth within the United Kingdom rather than allowing this kind of wealth to simply leak overseas. ... I am not yet convinced that the use of SIPPS for residential property purchases will automatically impact on the cost or availability of affordable housing for purchase. However, the first year of the operation of the new rules will need to be monitored extremely carefully. I shall have no hesitation in raising this matter in the House of Commons, and proposing changes to the rules, if there is the slightest evidence that the new rules on SIPPS are impacting adversely on first time buyers. Holly sh!t! You really should put this in the "SIPPS myth debunked" pinned thread: given the continuing weakness and isolation of the PM and the likely tarnishing of his chancellors reputation, it is ABSOLUTE DYNAMITE! Imagine suggesting as a serving MP in the governing party, that a rule that will TRAP wealthy peoples' money in the country could later be subject to changes! Why imagine: he just did it! If I were thinking of bringing some tax exiled money back to the UK to shelter it in a SIPP this would scare the conkers off me! Quote Link to comment Share on other sites More sharing options...
gone west Posted November 3, 2005 Share Posted November 3, 2005 ...and to maintain a low interest rate policy will help to alleviate the current difficulties. They don't even bother to hide their control of the BoE any more. Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted November 4, 2005 Share Posted November 4, 2005 i read the reply out in the voice of oliver postgate and it did sound more sincere. Quote Link to comment Share on other sites More sharing options...
simon99 Posted November 4, 2005 Share Posted November 4, 2005 (edited) From the MP's letter above: "Having said that, there is no question that the affordability of property for first time buyers is an extremely important issue at the moment. The Government's plans to increase the supply of affordable housing, to introduce new shared ownership schemes and to maintain a low interest rate policy will help to alleviate the current difficulties" Shared ownership schemes are likely to be more damaging than SIPPs in forcing prices up, its not about helping FTB's its about preventing the house of cards from collapsing. Low rates have also caused this ludicrous situation, just shows how short sighted those in power really are or rather how much they want house prices to stay high. If I could choose scrapping SIPP's or Shared ownership it would definitely be shared ownership. Edited November 4, 2005 by simon99 Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted November 4, 2005 Share Posted November 4, 2005 You lucky gits! I wrote to The treasury and My Local Labour MP (Chris Smith) Whom I hearby name and shame for not even giving me a standardised reply in over 2 weeks. Don't forget to vote everyone! Quote Link to comment Share on other sites More sharing options...
since the beginning Posted November 4, 2005 Share Posted November 4, 2005 It should also be recognised that there is an advantage in encouraging extremely wealthy people to reinvest their wealth within the United Kingdom rather than allowing this kind of wealthy to simply leak overseas. I hate the way they always say buying a house is an Investment', no wonder the UK's ******ed. You wouldn't say i'm investing in a new washing machine, new car, new apple. Quote Link to comment Share on other sites More sharing options...
IPOD Posted November 4, 2005 Share Posted November 4, 2005 The Government's plans to increase the supply of affordable housing, to introduce new shared ownership schemes and to maintain a low interest rate policy will help to alleviate the current difficulties" What a load of b0ll0cks. Low interest rates are part of the problem, not the solution. Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted November 4, 2005 Share Posted November 4, 2005 (edited) Just saw my own typ: Holly sh!t! Festive but painful! Edited November 4, 2005 by Sledgehead Quote Link to comment Share on other sites More sharing options...
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