James Hay & The IPS Partnership is lobbying the Treasury to increase the Sipp commercial property investment gearing allowance to the pre-A-Day level of 75 per cent.
Under current HMRC rules imposed by the previous Labour Government in 2006, Sipps can only expose themselves to 33 per cent of a property’s value.
James Hay & The IPS Partnership business development director Richard Mattison says the number of new property purchases by Sipps has reduced by around two-thirds as a result.
He says: “At a time when a return to the previous regime would help to increase the level of savings, boost demand for commercial property, help to get the banks lending, provide assistance for small businesses and entrepreneurs and help the rural economy, we think that the number one objective for the Sipp industry in 2011 is to get the pre-A-Day borrowing limits reinstated.”
Worldwide Financial Planning IFA Nick McBreen says: “HMRC’s post-A-Day policy on the gearing allowance was very Draconian and totally unnecessary.”