Grandparents will be able to buy a property within their Sipp, get a 40% tax relief and let their grandchildren live there rent free from A-day!
The Revenue put a benefit-in-kind charge on anyone who holds their residential property in a Sipp and lives in it to stop abuse of the rules, but they leave loopholes for certain relatives.
The benefit-in-kind charge, which is equivalent to rent for the property, applies to the property owner, their spouse, children, dependents, parents, guests or domestic staff, but it excludes siblings, grandparents and grandchildren.
The Liberal Democrats plan questions in Parliament on the issue, which they see as 'an unacceptable perk for the better off'.
Our view
We believe this loophole in the wording will be closed.
Learn more about Pension Simplification in our Pensions Adviser.com site.