SIPP providers ‘suspend transactions' with £200m Caribbean property investment

Harlequin Properties invests in off-plan apartments and villas in the Caribbean with investors paying 30% of the price upfront, with the promise by Harlequin in its promotional literature of a guaranteed mortgage for the remaining 70%.

However in an email seen by IFAonline, group operations manager at Tailormade Introducers Tracey Peden said a number of SIPP providers had suspended dealings with Harlequin.

"Many SIPP providers have temporarily suspended anymore transactions to Harlequin due to spurious concerns raised by Regulatory Legal over the Harlequin Product.

"We are in communication with our SIPP providers in order to establish with them what's changed and what they need by way of documentation in order to remove the suspension."

Harlequin and Peden said since the email was sent on 10 December some SIPP providers had lifted their suspension.

In a statement, Harlequin said:"The e-mail referred to is a month old and the matter raised has since been resolved. We have a very good relationship with Tailormade and many firms throughout the SIPP market who continue to accept Harlequin properties as suitable for SIPP investment."

Several large SIPP providers said they had never allowed investments from Harlequin.

A spokesperson for James Hay said it does not take investments into Harlequin Properties because it believes it is "unsuitable for a pension".

Barnett Waddingham said it has no holdings in Harlequin at this time.

Mike Morrison, head of platform marketing , AJ Bell, added commercial property in SIPPs needed to be "closely monitored".

Martin Tilley, director of technical services, Dentons, said the provider has not accepted overseas properties into its SIPPs "for quite a while".

"Past reviews of off plan overseas hotel rooms revealed that several did not get built on time, within budget and those that did failed to achieve either the expected rental and thus investment yields, nor did the projected capital values upon completion materialise.

"Being non-regulated investments, we treat all literature claims as false until we can verify through independent sources that they are accurate. Several [for Harlequin] we were unable to do.

"We also look at costs of investment versus actual asset worth. We found that a disproportionate amount of commissions and incentives inflated the investment price well above true asset value."

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• Topics
• Alternative Investments
• Property Investment
• Pensions
• residential property
• SIPP
• Harlequin