IFAs have highlighted the dangers to investors of placing part of their SIPP in off-plan overseas hotel developments, arguing the advice process is blighted by unfair commission charges, a lack of due diligence and transparency concerns.
SIPP investments in residential property are subject to harsh tax penalties, but investment in commercial properties, such as hotel rooms, is permitted as long as the investor does not then own the room outright or live in it. Simon Hodge, director of Simon Hodge Financial Planning, said: “The flavour of the day seems to be targeting clients with a small pension pot of around £30,000 with a view to transferring to a SIPP, and then getting the clients to buy an offshore, off-plan hotel room development with the promise of high income returns.” Hodge explained the commission on transact...
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