19/05/2022
Property investment in pensions now a reality with new products
Buy to let property has seen strong demand from retail investors in recent years. This appetite has been driven by a general acceptance of real estate’s stability and relative lack of volatility. Investing in directly held property using a pension scheme has historically been limited due to the lack of available products. GDCV.com has been established to fill this void.
The legislation governing pension scheme investments was introduced in the Finance Act 2004 but there has been little innovation in this area to date. The law dictates that where a pension scheme makes an investment into residential property, it must do so through what HMRC describe as a “Genuinely Diverse Commercial Vehicle” (GDCV) to avoid tax penalties. Product offerings in the market to date have been limited and costly, generally in the tens of thousands of pounds, making them prohibitive for the average investor. GDCV.com have launched an initial suite of four products that have been registered with HMRC, all of which are designed to simplify property investment using pensions.
“Property investment using often redundant pensions is the holy grail for many investors seeking to start a property portfolio,” said Tony Gimple, a property and tax commentator. “Being able to obtain buy to let mortgages against property within the tax-free wrapper of a pension scheme also makes this very attractive,” he added.
GDCV.com has spent the last three years thoroughly researching the opportunities to deliver affordable products to the market and the last twelve months creating them. Directly held real estate is an under-represented asset class in Self-Invested Personal Pensions (SIPP) and Small Self-Administered Schemes (SSAS). GDCV.com seek to increase accessibility for all pension scheme investors.
