Written question asked by Philip Davies (Conservative) on Monday, 15 October 2007, in the House of Commons. It was due for an answer on Wednesday, 17 October 2007. It was answered by Baroness Ussher (Labour) on Tuesday, 23 October 2007 on behalf of the Treasury.

Personal Pensions: Property

Question: To ask the Chancellor of the Exchequer if he will allow buy-to-let properties to be included in self-invested personal pensions.

Answer: Successive Governments have provided generous tax relief on pensions saving to support individuals to make provision for a secure income in retirement, not to build assets or wealth. Self invested personal pensions (SIPPs) allow individuals who want to manage their tax relieved pension investments to do so. But buy-to-let properties are precluded from tax relief on pensions, if held by member-directed schemes, because of the potential for abuse by using the generous tax-reliefs for purposes other than to provide an income in retirement.The Government remain committed to encouraging investment in a range of assets as part of pensions saving and therefore allows SIPPs to invest in residential property as long as it is done via a genuinely diverse commercial vehicle in which they have a less than 10 per cent. interest.

Secondary information