Buying French Leaseback property with your pension Article Published: 14:19 15/01/2008 Article Classification: Val d Allos
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Q : Is this permitted in the ROI for all pension funds?

A: Subject to a number of conditions, it is permitted to transfer funds held in occupational pension schemes or Personal Retirement Savings Accounts to overseas pensions, including SIPPS. It is not permitted to transfer Retirement Annuity Contracts overseas however it may in some circumstances be possible to transfer funds held in a RAC to a PRSA and then transfer the funds overseas.

Q: Does the money have to be changed into sterling?

A: No it can all be done in Euros so you lose nothing in exchange costs when you buy in France.

Q: Is there any way I could buy a non leaseback French property, say, a flat in Paris?

A: Not using a SIPP because the property must be commercial. However, there are other avenues which we can discuss with you. These are only suitable for bigger funds because of the costs and complexity involved.

Q: What happens if I use the property myself, say, by renting 2 weeks of the leaseback for myself?

A: UK residents are subject to benefit in kind charge unless they pay a market rent for the property. The UK would probably not, however tax you to this charge if you were ROI resident because you would not be within the scope of UK tax. You would need to check the ROI position to decide whether you need to put this down on your ROI income tax return.

Q: I have an existing French leaseback could I sell it to my SIPP fund and take the money out of my pension fund?

A: Yes, provided it is done at market value. There will be no French taxes to pay and notaires fees will be under €350. There may be Irish capital gains tax as you will be selling the property to your SIPP. You will need advice from an ROI adviser in this respect.

Q: How is the rent and capital gains taxed in France?

A: The structure we use results in very little income tax if any being paid in France and in most cases no French Capital Gains Tax. No tax will be payable in the UK as SIPPs are tax exempt vehicles here. You will need to seek advice from an ROI adviser as to the taxation of the income and capital gains by the ROI Revenue.