§ Hywel WilliamsTo ask the Chancellor of the Exchequer (1) what estimates have been made of the cost of implementing the tax relief proposals on purchasing residential property through(a) SIPPS and (b) SAPPS in terms of tax forgone for each financial year until 2010; [161364]
(2) what estimates have been made of the number of people taking up proposals announced in the Pre Budget Report to purchase residential property through (a) SIPPS and (b) SAPPS. [161365]
664W
§ Ruth KellyThe majority of pension savers—over 14 million—are members of schemes currently free to invest in residential property. The new rules will provide a level playing field by allowing some specialised pension funds (SIPPS and SAPPS), held by around 200,000 people, to invest in property for the first time. However for the vast majority of these people investing in property will have little or no attraction because all rental income must go into the pension fund and the property must be sold before the pension can be drawn. Neither do the proposed changes present a 40 per cent. tax break, as some have suggested, as any use of the property for personal use will incur a tax charge.