SIPPs gearing rules poor, says AJ Bell

New gearing limits could affect SIPP members negatively compared with existing borrowing limits, as wording in Clause 171 of the Bill is causing confusion as to its interpretation. ”There are two issues here,” says AJ Bell managing director Andy Bell. ”One is the reduced borrowing ability that hits SIPPs. The other is a technical issue relating to the framing of the rules.” Currently, SIPPs can borrow up to 75% to acquire property, and borrow an additional amount over the short term equal to 100% of any VAT applied. This means a SIPP with £25,000 in cash can borrow up to £75,000 t...