A Self Invested Personal Pension, known as a SIPP, is a personal pension for which the person investing for retirement decides what their pension fund is invested in. Traditionally pensions are managed by a pension fund manager who may invest in volatile stocks and shares or boring old cash and the investor has no control or influence on this decision.
Any type of pension can be transferred into a SIPP. For instance, many people have several ‘frozen’ pensions from previous employment or businesses and/or personal pensions that they can transfer.
If an investor already has a SIPP, or once the SIPP has been set up, the investor selects the property they wish the SIPP Trustees to invest in. It is also possible to increase the amount of funds available in a SIPP by borrowing up to a further 50% of the value of the SIPP. For example if a SIPP has funds of £200,000, it can borrow another £100,000 making available £300,000 to invest.
An investor using a SIPP can make further contributions ongoing into their SIPP and is entitled to full tax relief which means that if a 40% tax payer paid in £100,000 it could only cost him £60,000.
Contact International Luxury Real Estate for more info about SIPP property.
