For UK citizens, land investments introduced by Landcorp International qualify to be included within specific pension products that are eligible for significant tax incentives. These include SIPPs and QROPS.
Self Invested Personal Pension (SIPP)
A self invested personal pension (SIPP) is a flexible, alternative way to save for your retirement if you are a UK tax payer. The fund gives individuals the power to decide when, where and how the assets of their pension fund are invested. It is a UK government approved personal pension scheme that allows a diverse range of investments to be included, as governed by HM Revenue & Customs (HMRC).
The tax advantages to assets held within a SIPP are very appealing; contributions to SIPPs are treated identically to contributions to personal pensions with reduced tax liability. Individual contributions automatically receive basic rate tax relief whilst higher rate taxpayers can claim additional relief through their tax returns. Income from assets under a SIPP is not taxed and there is no capital gains tax on capital growth.
Pre-development land qualifies as commercial land. To give an idea of the savings to be made, a £20,000 land investment held in a SIPP could cost you as little as £12,000 thanks to tax relief.
Qualifying Recognised Overseas Pension Scheme (QROPS)
As of 6th April 2006, under Her Majesty’s Revenue & Customs (HMRC) in the United Kingdom, every UK pension scheme (other than state benefit) can be transferred into a Qualifying Recognised Overseas Pension Scheme (QROPS). This is an investment vehicle that allows existing registered pension schemes to be transferred overseas for individuals residing abroad. Put simply, it is an overseas pension scheme into which your UK pension can be transferred.
QROPS allows you to invest through an extensive range of investment options, including investment property, and provides for a number of tax advantages. QROPS is not subject to UK Inheritance Tax and can be passed on to beneficiaries without deduction of UK tax. Other tax benefits may arise from the country in which the QROPS is located. If, for example, you are in a country where personal pensions are not liable for capital gains tax (CGT) on any capital growth, you will not be liable to pay CGT in the QROPS country nor in the UK.
It is always advisable to seek professional fiscal assistance that will be able to explore further tax advantages of the QROPS scheme.
