View more on these topics

Hay asks Revenue to rethink Sipp policy

James Hay is calling on HM Revenue & Customs to review its tax charge on remortgages for commercial property held in Sipps to allow investors to take advantage of lower mortgage rates.

The firm claims many Sipp investors who bought commercial property with a mortgage of up to 75 per cent loan to value before A-Day are stuck on high-interest mortgages. This is because A-Day changes reduced the maximum LTV for properties within a Sipp to 50 per cent and introduced a tax charge of 40 per cent for anyone remortgaging above this level.

Hay says in 2005, before A-Day changes came into force, more than 90 per cent of its Sipps invested in property and a third of these investments were above 50 per cent LTV. But mortgage rates have since come down as the Bank of England bank rate has fallen by 4 per cent.

Technical pensions manager Ian Westwater says: “Many investors are now waking up to the fact that they simply have no option but to either sit on a high interest rate or pay higher tax. HMRC needs to take extenuating economic circumstances into consideration and change their policy on taking out new loans on property already held within the Sipp so that investors can take advantage of lower interest rates.”

Hargreaves Lansdown head of pension research Tom McPhail says: “I cannot see that this is a legitimate argument for a change in the rules. If investors are struggling to afford their mortgages now, then you have to question the original advice on the affordability of the loan.”


Provocation plea

Advisers should consider moving away from solution selling to dealing with areas of anxiety

Health - thumbnail

Absence management systems gone AWOL from UK’s SMEs, reports Jelf

A quarter (23 per cent)* of the UK’s small to medium-sized enterprises (SMEs) do not have an absence management system in place, according to new research from Jelf Employee Benefits. Despite 69 per cent* of organisations having a system in place, three-quarters (75 per cent) report that it is not providing them with sufficiently empowering absence or health data to inform an effective wellbeing programme.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm