The new law, which came into force on March 2, recognises trusts and therefore makes it easier for Sipps and member-directed schemes to own French property.
Rowanmoor is now seeking advice from its specialist legal advisers on how to maximise this opportunity and minimise any risk for its UK clients.
Rowanmoor head of technical services Robert Graves says: “We could now see much greater interest in French property and our specialist property team at Rowanmoor and our legal advisers are investigating this opportunity right now.
“Pension scheme trustees must have good title to investments and this law change should ensure this but other aspects of owning property also need to be considered.”
But Graves adds: “It is worth remembering though that no matter where it is located, residential property is taxable if held in a UK pension scheme, so this development is not a panacea for ‘Sipp-ing’ a French holiday cottage. Also whilst investments held in a UK pension scheme get favourable UK tax treatment, French taxes could still apply. This is why clients need to seek specialist advice.”
Freedom Sipp, which went into administration last year, had a large amount of French property assets which other providers were reluctant to take on.