HMRC 'has not changed stance on pension investments'
Freedom SIPP customers will still be liable to tax on property investments
Freedom SIPP customers will still be liable to tax on property investments
THE TAXMAN has not softened its stance towards a pension scheme that allows investors to buy hotel rooms and lease them back, the pensions’ administrator has said.
Freedom SIPP (self-invested personal pensions) was wound up in 2009 for failing to pay £66m in tax that was owed to HM Revenue & Customs. The taxman claimed that the lease-back arrangement it ran in France – which allows investors to stay in hotel rooms they have bought through their SIPP scheme – classified the property as residential rather than commercial. Under HMRC regulations, a SIPP will be liable to tax if it includes a residential property.
A Sunday Times report suggested that HMRC had written to law firm Sykes Anderson, which represents clients of Freedom SIPP, to say that arrangements in one of the cases had now been approved.
However, Bob Woods, chairman of the SIPP’s administrators Mattioli Woods, told New Model Adviser: “The reality is that of the 15 clients with French property, only three have been deemed to be legitimate commercial property and the remainder have been confirmed as being taxable property and are likely to be hit with significant personal tax liabilities as a result.”
HMRC has continued to tell investors that there would be a tax charge on the investments except when no property had been built.
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