SIPP  

Advisers divided about holding property in Sipps

But some advisers see property as a good asset to hold in a Sipp.

Martin Tilley, pensions director at Hurley Partners, said the vast majority of advisers were receptive to the idea and would always hold the option as one within their solutions portfolios.

Mr Tilley said: “Previous difficulties with dealing with providers and the timescales/admin/conditions imposed – such as selected solicitors, insurers and property management can sometimes put advisers off.

“However, with a well-chosen Sipp provider, the fears about a slow, inaccurate and controlling provider are no longer applicable.

"A switched-on Sipp provider should be able to turn around a property purchase in a timescale no longer than it takes for the company to acquire the property.”

He also claimed that high charges should not put people off from looking into this solution.

Mr Tilley said: “There is a competitive marketplace amongst Sipp providers and the better ones now have slick operations able to turn around the more straightforward cases in 5-6 weeks for circa £1,000 plus VAT including a lease.”

Despite this, he agreed this solution was not for everyone as it could trigger tax bills.

He added: “Disposal by the company to the pension is a taxable event triggering a capital gain and some directors also don’t like the thought that they no longer own the property thinking that the pension provider will impose conditions upon them which they’d not face as owners.

“It’s true that whilst any provider will insist upon arm’s length occupancy terms being applied, they should be no more conditional than any third party landlord, with the added advantage of the rent being paid directly into the directors pension.”

amy.austin@ft.com

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