Taxable property rules are nonsensical - Rowanmoor

The Chancellor should use the next budget to remove "nonsensical rules" governing pension scheme investment in taxable property, Rowanmoor Pensions says.

The small self-administered scheme provider believes it is up to the government to help small and medium sized businesses survive the recession and removing restrictions of this kind would be a good first step.

Rowanmoor joint managing director David Seaton says: "With simplification, many said the SSAS was dead. In the current economic climate, as the shortage of funds hits so many small businesses in the UK we have seen a rising interest in SSAS, due to their ability to lend back to the company.

"With the budget, the government has the opportunity to do more to help the economy and in particular SMEs. Investment in SMEs is vital to this country getting out of the appalling mess it is in. The investment of existing money held within pension funds into successful businesses to aid growth seems to be a no brainer."

Speaking at the Henry Stewart SASS Conference, Seaton asked the Chancellor to "consider removing some of the nonsensical rules on taxable property".

He said: "Why shouldn't a pension scheme invest in plant and machinery and lease it to a business? What is wrong with that so long as it is an item that is not used by the members? Why should such investment be classified as an unauthorised member payment with crippling taxes being charged to the member or members?

"With the banks shying away from any lending for any purpose it seems a simple step to help the appalling crisis the government has created. The term tangible moveable property may be being misinterpreted by HMRC. Such a move would stop this current nonsense."