Seems residential properties are to be excluded from SIPPS....

http://news.bbc.co.uk/1/shared/bsp/hi/pdfs...report_1980.pdf

"5.63 ... from 6 April 2006 SIPPs and all
other forms of self-directed pensions will be prohibited from obtaining tax advantages
when investing in residential property, and certain other assets such as fine wines.

This action will ensure that tax relief is only given to those whose purpose in making the
contribution is to provide themselves with a secure retirement income. However, the
Government remains committed to encouraging investment in a range of assets as part of
pensions saving and is therefore minded to allow SIPPs to invest in genuinely diverse
commercial vehicles that hold residential property, such as the proposed Real Estate
Investment Trust model (detailed further in Chapter 3). The Government will not hesitate to
take action if it becomes clear that people are trying to use collective vehicles to get around
the rules for prohibited assets."

ooops!

Holy Sh*t!!! with this and poor christmas trading figures, I wonder if this will be a major catalyst to popped bubble?
I wouldnt mind betting that it is. All that positive spin, that was keeping the market propped due to promises of SIPPS has now been removed. Down Like a house of cards.....

Has he just blown SIPPS out the water?

Seems to good to be true

I'd like to know too. Where's our SIPPs experts ? Financial Planner and Bubble Pricker ?

Fugging Aye!!!!

Ain't it amazing what can 'make your day' ?

... and can we have a quick layman's on "Real Estate Investment Trust model", from someone in the know? I haven't heard of this before.

Thanks.

We live in a cheap country.. Well an affordable country..
but with no children of our own our generation is going to have a hard time retiring..
(forget taxes.. I was going to move in with the buggers as soon as I lost control of my bladder..)

High House prices were going to kill the country... as we entered a holding pattern and our peers entered a massive debt crisis...
No life for us.. a life of massive debt for others.

this might have been the most important decision made for the countries future

http://news.ft.com/cms/s/3d30f6ae-65ab-11d...00779e2340.html

I'm not convinced that this will make much of a difference... but good riddance to what would have been an unfair handout to the mega rich.

REITs are a far more equitable approach and will help build the residental lettings sector within a more professional framework. Large property management companies will build up portfolios of cheap residential property once the small scale BTL landlords realise they need to dump their shoddy little shoeboxes!

Muha ha ha ha ha ha ha ha !!!!!



I smell blood .....

Initial reaction here at "large pan-European IFA" is that it completely stuffs residential property in a SIPP. Not only will tax relief not be payable but "tax advantages" eg gross roll up - has also disappeared.

REITs are collective investments. Big business but really only in the commercial property market. They can borrow and they can gear up.

The Fox

You lot are getting as sneaky as VI's at trying to hide key points in a text. You missed out:

"For the purpose of funding purchases of holiday or second homes for their or their familys personal use" will be prohibited from obtaining tax advantage.

Naughty, naughty!

Thanks, foxy!

This is amazing news, not that it would have had a huge effect come Aprt 06 but there are so many muppets I know who were clinging on to the SIPPS dream to save them I dont know what they are going to do now. Get ready for an avalanche of flats coming to market over the coming weeks.

Love to see there faces when they pick up the paper on the train tomorrow.

Although this is great news it seems to read "investing in holiday homes is a bad idea" and then go on to say "so we're stopping tax advantages in all residential property". This can't be right. It names one problem and then goes against something else entirely.

Oh heck, I'm just going to have to drink all that fine wine I put away in anticipation. Still, at least I invested in a liquid asset - not brcks and mortar

Not at all. Read the article for yourself:

http://www.thisismoney.co.uk/retirement/ar...13&in_page_id=6

It was mentioned here in the office and I just sat and stared and I couldn't believe it.

'It's true?' I stammered

They said, 'it's true'

Ooh, my heart jumped for joy. I was in wonderland. I was in heaven.

Heaven, I'm in heaven.

YEEEEEEEHAAAAAAHAHAHAHAHAHAHAHA




Fack knows what Hargreaves Lansdowne are going to do with their 4000 SIPPs they sold to get people into res prop.

Brown closes door on property in pensions

FT Story

Now, as someone who thought the whole Sipp argument was mostly hot air I can't get TOO excited that it seems to have evaporated completely.

Still.

If you re read it they are saying that for the reason you quote above they will not allow ANY residential property into pensions except through reits.

Maybe the old dementia is setting in.

I share your disbelief but he clearly says "SIPPs and all
other forms of self-directed pensions will be prohibited from obtaining tax advantages
when investing in residential property".

It could be that it is loosely worded and what he means by residential property is only property that the retiree (or connected parties) live in, but most discussion of SIPPs has lumped together all residential property - whether for a profit or not.

welcome to the Gordon Brown fanclub!

Who'd have thunk it??

All those property flippers and speculators that have bought this Autumn to sell on in the Spring to the SIPPERs have just been flipped by Gordon.

Thank you FP ! I'm definitely going out for a beer or three tonight ! If you seem me on later here just ignore me, cos I'll probably be as pissed as a fart.

I think Brown realised that the SIPPs tax reliefs on residential property were going to cost the Treasury much more than originally thought, and as the public finances are already stretched as it is, he simply can't afford it.

There are going to be a lot of smug grins wiped off the faces of EAs . Over the past six months, I've heard nothing but SIPPS SIPPS SIPPS out of just about every EA I've spoken to.

COUNTDOWN TO THE CRASH OF 2006

1. Mervyn King warns property can go down as well as up

2. Interest rates go up to 4.75% summer 04

3. 05/12/05 in a shock move Gordon Brown removes residential property from SIPPS


YOU COULDNT MAKE IT UP

4. Feb 2006 - in a surprise move the BoE increases interest rates?

What have the EAs got left now to pin people hopes on ? That's right - NOTHING.

I think we should hold our horses, just for a minute. This could be a misunderstanding - he could mean by "residential property" the property in which the beneficiary is resident - holiday homes, etc.

Admittedly if we did get this wrong then so have the FT, ACCA, etc, and so there must be a clarification soon. Either way it looks like a cock up.

Wow - Do you think classix could put something together along with the theme tune to 'tales of the unexpected'.

This is good news all round.

Added: -

Let's hold off on any celebrations until we have confirmation that BTL properties are excluded!

I, too, think this is going to have a significant impact on seller sentiment. When I was house-hunting in England in October (just looking--no intention of buying yet), sellers and estate agents keep talking about how SIPPS was going to create a new demand for housing in the spring.

A lot of sellers are going to be very nervous once they hear this news.

Pigs singing??

Apparently these seem to be the only ones left:



http://www.rivercottage.net/rcv2/food/meat...d&food=meat_box

65 Year "Japanese" mortgages?

I've have had much corresponce with HL this year. They've always seemed fairly pragmatic/tad bearish on residential property in SIPP's. However, one of their advisers did say that interest in residential property was all that was driving their sales.

This is great news!

These people are going to want to find somewhere else to put their money. I wonder where that could be?

In reality there was probably no way whatsover to actively ensure that property was not bought as a second home and not a stangnat BTL or some such. A tax giveaway on second homes for high earners would have been political suicide if it had been seen to have any effect whatsoever on the market (especiallly rural depopulation) - the EA's and VI's may have shot themselves in the foot, they have highlighted and promoted this so much that very few would have associtaed being outpriced with GB's actions.

IMHO it will make a huge difference to peoples' expectations of future house price movements.

Even though we here knew that very few people would have been able to take advantage of residential property in SIPPS next April, the expectations of a boost to the market in April was creating a significant boost to the market now.

That expectation is now gone, and I will be enjoying a 'sipp' or two of something strong this evening as this could well be the trigger we've been hoping for.

already got a glass of champers on the go

More meat on HMRC website at this link (apologies if previously posted):

http://www.hmrc.gov.uk/pbr2005/pensions-simplification.pdf

Pah! Got collared for overtime tonight, so no wine for me

Make sure you all have one on my behalf.

Ive always said our politicians are the best in the world!

Fine wine, surely? What else are you going to do with it?




Webmaster - Please feel free to delete my thread "Help save my dad from being a property developer with SIPPs."

Thankyou.

Looks like that is it then---the EAs will have to forget the Spring bounce altogether. This will have a severely depressing impact on the 2nd home marketplace and may well put many EA jobs at risk before Christmas. Any hoped for pick up in the housing market in the Spring must now be put aside as we, the Irish and the Spanish assess the prospects for the most overpriced house prices in the world.

Early 2006 looks like it folks. The downhill thrill ride begins!

I thought of that thread, but couldn't remember your name (sorry). Have you mentioned Brown to your Dad tonight?




I hope so.

Libs - I'm still at work. Daren't go home!

I am not going to say a word.

He's already signed up for buying the flat.

The is the best news I've read in MONTHS!!!

And there was me complaining nothing was happening.

Nothing is happening (to Sipps)!

Love to be a fly on the wall at Foxtons tomorrow morning

This is great news.

Well done everyone who wrote to their MPs. Quite a few of us did. I like to think that in a very small way we helped to make our government aware of the anger about SIPPs.

My MP recently wrote to me to tell me he would be discussing my concerns about SIPPs with Gordon Brown, and replying to me with a more detailed explanation of the policy. I'm looking forward to the receiving the letter now.

I expect there are a lot of flies on the walls of Foxtons...the place reeks of (bull)sh*t.