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Winterthur says too late for Govt simplification backtrack

It is too late to backtrack on pensions simplification as IFAs are already reviewing client portfolios ahead of next April, says Winterthur Life.

Pensions strategy manager Mike Morrison was res-ponding to press reports calling for the Treasury to omit certain features of the new regime, such as allowing residential property in a Sipp, at the provider’s Summer roadshow in Harrogate.

Citing reports that A-Day will only reward the rich in terms of tax relief to fund property purchase, Morrison said one of the key provisions of the new regime is the lifetime allowance which restricts the amount of fund on which an investor can get tax relief.

Allowing residential property in pensions has been criticised in the media as giving tax breaks to buy-to- let landlords when first-time buyers are struggling to get on the property ladder.

Morrison also said placing residential property in a Sipp may look attractive on paper but the number of people doing this will be limited due to the low size of the average pension fund.

He said: “Portfolios will have been appraised to maximise funding under the new rules and measures will have been put in place to utilise tax-free cash and unused relief. The adviser may have already reviewed options with the client to make residential property purchase investments and other investments permitted under the new regime.”

Dickson Lishman Prince partner Richard Lishman says: “It would be a crazy move for the Government to backtrack on this issue now considering the amount of time and effort the indus- try has spent anticipating next April but then again nothing would surprise me about the Government on this issue.”

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