I agree with Andrew's comments.
The only response so far on this matter from both technical and policy is that rules are rules!!
Mike Norris
Transfers of property SIPPS with pre A-Day borrowing exceeding 50% of asset value
Transfers of property SIPPS with pre A-Day borrowing exceeding 50% of asset value
I raised this problem at the request of a client (also an AMPS Member) at the last HMRC PSS Customer Forum at the end of November 2008. As is their wont, HMRC asked me to come back with more figures - I had already given them some - to illustrate the scale of the problem. As with other Govt Depts, it seems they will only treat a problem seriously once they become convinced a lot of people are affected.
Have any other AMPS Members experienced problems with transfers of pre-A Day property SIPPs? If you have, please can you estimate what percentage of your potential or actual clients have been affected?
Thanks
Ian Neale
Aries
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Submitted by jmulford on Mon, 2009-02-23 12:48.
I have recently as the HMRC for some guidance on a similar question.I have a client who is unhappy with his current SIPP provider and wishes to transfer to ourselves. I have asked the HMRC for guidance on whether the lending can be novated at pre 'A' day rates if the lending is to remain unaltered and it is only the scheme trustee that is going to change.
Is this a similar question to the one you have asked?
Regards
Michael Cox
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Submitted by ineale on Wed, 2009-02-25 12:36.
Michael,
Yes. I am aware that AMPS itself has tried unsuccessfully to engage HMRC's sympathy. However, I think it is worth another attempt, especially if we focus on cases where the individual is effectively FORCED to switch to a new provider because the pre-A-Day provider is not longer authorised (for example). I suspect there are two barriers at HMRC which we might have to cross:
1. a desire to draw a line under 'transitional protection' issues and make no more amendments to the FA 2004 regime; and
2. the person or possibly persons who is/are declining to recognise the justice of the argument.
HMRC is more likely to pay attention if presented with numbers of individuals affected.
Ian
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Submitted by aroberts on Tue, 2009-03-03 11:39.
All
THe AMPS committee are in continuing discussion with HMRC regarding a number of matters and the issue of the new borrowing limits restricting a taxpayer's ability to remortgage is likely to be affecting more people now given the current economic climate.
However, if there is to be any hope of relaxation/clarification of the rules, then we need to be able to illustrate the extent of the problem. Therefore I would ask again that firms consider sending me an estimate of how many clients have borrowings that now exceed the 50% borrowing limit. The numbers will be used in confidence by the AMPS committee.
Thank you
Andrew Roberts - andrew.roberts@barnett-waddingham.co.uk
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Rebecca Aldridge - Cooper Parry Financial Services Limited
The effect of the HMRC rules is that they are being locked in (to both the pension provider and mortgage lender) for the term of the mortgage. Although HMRC may not be particularly sympathetic about that, it goes absolutely against the FSA's Treating Customers Fairly principle, which may be a useful argument to introduce.
To answer your question, we have only had a handful, perhaps 10 or so (of c 300 schemes in total), clients that have been affected by the rules. Most we have managed to move anyway, but some have no choice but to stay where they are (after having incurred time and expense in trying to move).
Beccy