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A Lancashire pension specialist has revealed there may be an opportunity for investors to make significant fully tax relievable pension contributions prior to changes in pension tax legislation.
Self Invested Personal Pensions (SIPPs) are popular with individual – and groups of – investors, entrepreneurs and professionals for the range of investment opportunities open to them, particularly the ability for the SIPP to purchase commercial property.
SIPPS are popular with investors due to their flexibility and tax benefits but the Government is proposing to lower the maximum annual amount, which can be paid in as a fully tax-relievable pension contribution, with the changes expected to come into force on April 6, 2011.
Jeremy Hunt, SIPP & SSAS account manager for Taylor Patterson, the Preston based financial services group, has urged relevant individuals with annual incomes of less than £130,000 to review their pension strategies in light of the forthcoming changes.
He said: “SIPPs are popular vehicles as they can be used to purchase commercial property in a tax efficient way. It is not uncommon for the SIPP member and or their Employer to a make significant fully tax relievable pension contribution to a SIPP in order to purchase commercial property. “Pension contributions to the Taylor Patterson SIPP, for instance, can be paid as ‘in specie contributions’ whereby the property is transferred to the SIPP with the benefit of tax relief.
“From April 2011, the annual allowances for pension contributions are likely to be lowered thus significantly reducing this useful tax planning opportunity.
“Existing and potential members of such pension funds, who are not classed as ‘high income’ individuals and who are considering commercial property purchase should start planning now to take advantage of the current more generous contribution allowance. Professional advice is important and members should consult their tax adviser.”