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Sipps get relative tax boost

Grandparents will be able to buy a property within their Sipp, get 40 per cent tax rel- ief and let their grandchildren live there rent-free from A-Day.

The Revenue slapped a benefit-in-kind charge on anyone who holds their residential property within a Sipp and lives in it to close off such abuses but the rules leave notable gaps for certain relatives.

The benefit-in-kind charge – which is equivalent to the going market rent for the property – applies to the property owner, their spouse, children, dependents, parents, guests or domestic staff but it excludes siblings, grandparents and grandchildren.

Brothers and sisters will be able to hold each other’s properties in their Sipps, claim the tax relief and let the other sibling live there rent-free under the Revenue’s rules.

The LibDems plan questions in Parliament on the issue, which they see as an unacceptable perk for the better-off.

Standard Life head of pension policy John Lawson says: “This would have a massive effect on the property market because it is not buy-to-let investors putting their properties into Sipps but people buying new properties to get the tax relief and live rent-free.”


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