UK - Sales in booming buy-to-let areas will be further fuelled by government plans to allow investments in pension plans, accountants claim.
But they warn that investors need to be cautious because the funds are locked in until retirement and access is heavily restricted.
Accountancy group UHY Hacker Young believes government proposals – which take effect from April 2006 – will appeal to shrewd investors who will convert savings to a self-invested personal pension and take advantage of the associated tax benefits.
A partner in the firm’s Manchester office, Clive Gawthorpe, said: “These proposals should be welcomed by shrewd investors who can get tax relief on their pension contributions. The pension fund won’t be liable for tax on the rental income received, nor will it have to pay tax if the property increases in value.
“The announcement follows the government’s proposals to cut tax-free investment in ISAs from £3000 to just £1000 per annum next year, and has been welcomed by those keen to exploit methods of tax-efficient investment.”
Gawthorpe added: “Prospective investors should realise this is still only proposed legislation and they should seek professional advice before setting up a pension fund with the sole purpose of investing in property.”
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The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.
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