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Sipp rentals to hit 8%

The rental charge for unconventional Sipp investments such as paintings and antiques is likely to be as high as 8 per cent, says Hornbuckle Mitchell director Neil Marsh.

The Inland Revenue requires people who use alternative investments within their Sipp, such as paintings hung at home or antiques, to pay the going market rent for what is eff- ectively a benefit in kind.

Marsh said discussions with officials and industry figures have delivered a consensus figure of 8 per cent which could deter many investors.

He warned that the majority of Sipp providers will also not want to deal with the valuation and insurance of niche items.

Marsh says the Revenue has already said that it will levy a charge on assets that it deems to be depreciating, effectively ruling out clas- sic cars as Sipp holdings as these will face a wasting asset charge.

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