Commercial property investors boosted by tax rule change
The commercial property sector could be given a much-needed boost with the relaxation of tax rules regarding Self-Invested Pension Plans (Sipps).An update from HM Revenue & Customs (HMRC) will allow investors who hold commercial property within their portfolios to more easily transfer their Sipps from provider to provider.
Under the new regime, people who make the transfers will not be subject to the A-Day pension rules introduced in 2006 - which carries extra charges attached to the rules.
A real estate investment trust (Reit) specialist has welcomed the change.
Philip Fry at commercial property specialists Reita said: "Given the recent budget changes to pension taxation for higher earners, such as the reduction of higher rate tax relief, there should already be increased incentive for investors to consider placing commercial property in their Sipps, with the potential benefit of tax free growth and the added flexibility Sipps can provide.
"The ability to invest in unquoted shares and intangible assets is very attractive to Sipp investors and, following this recent confirmation from HMRC, we are delighted that more opportunity now exists for further commercial property investment as a result of the rules relaxation."