Managing SIPP Investments

From April 2006 it will be possible, for the first time, for personal pension plans (SIPPS) to invest in residential, as opposed to commercial, property. This facility will include residential property abroad, providing the opportunity for the SIPPS investor to realise his dream of acquiring a holiday or eventual retirement property in the sun, with up to 40% of the cost paid for by the UK taxman!

However, while numerous press articles have trumpeted the advantages of being able to do this, few have focused in on the restrictions and limitations that are inherent to the process. In particular it is essential for the pensioner trustee who is appointed to oversee the workings of the SIPP, to be comfortable with all aspects of the investment, and to be able to ratify that, in his opinion, it represents a suitable investment for the SIPP concerned.

In our view, the only way for this to be achieved is for a professional property management (and letting – since, from an investment point of view, it will probably be necessary to let out the property concerned) agent to be put in place. Such an agent will need to be responsible for seeing that the property purchase takes place correctly in the first place (no dodgy part-cash deals) and that the property’s title is correctly registered and that proper insurance is in place. It will also be necessary to ensure that local taxes are correctly paid, in particular on rental income if the property is indeed to be let out.

West Midlands Property Management Ltd is able to offer exactly such a service so far as properties located on the Spanish mainland are concerned. We do not pretend to an expertise outside this geographical area, but we do claim to an expertise second to none within it. In particular WMPM is one of the few companies associated with the Spanish property market that operates completely independently of all developers, estate agents and the like. Accordingly we can give unbiased advice on the best locations in which to make your purchase, in addition to being able to offer an existing selection of newly built properties that have been cherry-picked for their excellence.

So far as the letting of such properties is concerned, we are able to call on the services of our sister company, trading as www.SpainAway.com, a specialist travel company with an excellent pedigree in villa and apartment rental, in addition to other travel-related products, such as flights and car hire. Financially bonded, with both the TTA and ATOL, SpainAway is able to provide an equally professional service covering letting, maintenance and financial management.

Buying abroad is not simple: there are several further factors to be considered, such as the fact that Spanish law does not recognise the purchase of property within the structure of a trust, not to mention the existence of a complex taxation situation (including inheritance and capital gains taxes). Between them, WMPM and SpainAway are uniquely positioned to resolve these difficulties on the client’s behalf. Please click here if you would like to discuss this matter further with us.