BUY THROUGH YOUR PENSION PLAN (SIPP)
Current SIPP legislation permits borrowing of up to 50% of the net assets of the SIPP fund.
SIPP legislation states that the lending criteria is based on ‘serviceability' which in the case of Dunas Beach Resort, the resort will be ‘serviced' by an international hotel operator rental scheme.
What is a SIPP?
You can now use your pension fund/s to invest in an overseas property using a SIPP.
A Self Invested Personal Pension, known as a SIPP, is a personal pension for which the person investing for retirement has a greater control and choice where their pension fund is invested and the likely returns that can be generated.
Traditionally, conventional money purchase schemes are managed by a pension fund manager who may invest in potentially volatile stocks and shares, allowing you limited or no control or influence on how your money is invested or its performance.
With their wide investment choice SIPPs allow investors to study for themselves the best investments, while benefiting from the generous tax relief offered by conventional pension plans. If an investor already has a SIPP, or once the SIPP has been set up, the investor selects the investment they wish the SIPP Trustees to invest in.
It is also possible to increase the amount of funds available in a SIPP by borrowing up to a further 50% of the net assets held within the fund. For example; if a SIPP has net assets of £200,000, SIPP legislation permits up to £100,000 can be borrowed and re-invested in other SIPP compliant products.
An investor using a SIPP can make further contributions ongoing into their fund and is entitled to full tax relief between 20% - 40% (depending upon the tax bracket and annual earning of the investor).
For example, if the client earns £50,000 and the 40% tax threshold starts at £42,000, then a gross contribution of £8,000 will benefit from the full 40% tax relief.
A net contribution of £8,000 is automatically grossed up to £10,000 (20% basic rate tax relief) and the extra 20% (£2,000) can be reclaimed via your end of year tax return. Therefore, on this example a total investment of £10,000 would only actually cost £6,000.
Any contributions up to £42,000 (in this example) will benefit from 20% tax relief, grossed up immediately upon entry into the SIPP.
Tax relief is applied to gross contributions that do not exceed the client's annual income in the tax year the contribution is made. So, if for example a client earns £20,000 and pays in £30,000 into a SIPP, tax relief at 20% will applied to £20,000.
Consequently, astute investors have flocked to open a SIPP: leading them to grow from been a relatively niche - largely the preserve of wealthy individuals - to bordering on becoming a mainstream way to save for retirement for those who are happier making their own investment decisions.
Any type of pension can be transferred into a SIPP, for instance many people have several 'frozen' pensions from previous employment or businesses and/or personal pensions that they can transfer into a SIPP. This is a complex area and it does need professional advice.
Dunas Beach Resort – SIPP compliant
Dunas Beach Resort has passed through the compliance process of some of the largest independent providers of Self Invested Pensions in the UK.
A SIPP is a fully FSA regulated product and as such a full independent pension review is carried out to ensure you make the right investment choice.
Purchase Packages – SIPP Buyers
There are three possible ways in which you can invest through a SIPP.
SIPP Option 1 – 45% Deposit
45% Deposit – payable on contract
¤1.25 - £1.00 fixed exchange rate on full deposit *
Free air-conditioning
Free Legal Services
Free Hotel Excellence Furniture
55% on completion – At the normal daily spot ¤/£ rate
* The fixed exchange rate on offer can vary from month-to-month.
SIPP Option 2 – 65% Deposit
65% Deposit – payable on contract (¤1.25 - £1.00 fixed exchange rate on 45% of the deposit, 20% at the normal spot ¤/£ rate)*
Free air-conditioning
Free Legal Services
Free Hotel Excellence Furniture
5% Written off as discount
30% on completion – At the normal daily spot ¤/£ rate
* The fixed exchange rate on offer can vary from month-to-month.
SIPP Option 3 – 85% Deposit
85% Deposit – payable on contract (¤1.25 - £1.00 fixed exchange rate on 45% of the deposit, 40% at the normal spot ¤/£ rate)*
15% balance written off as discount
Free air-conditioning
Free Legal Services
Free Hotel Excellence Furniture
* The fixed exchange rate on offer can vary from month-to-month.
To download our comprehensive brochure on how to buy a property in Dunas Beach Resort through your Pension plan please complete the form below.
