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Why are you not able to transfer an unemcumbered property to self administered pensio

  • 16-01-2018 3:26pm
    #1
    Fol20
    Registered Users, Registered Users 2 Posts: 3,627 ✭✭✭


    Hey guys, I was just wondering what is the thinking behind being unable to transfer a house you own already to a self administered pension. I understand why you need to relinquish the management etc of it to a third party but I don’t understand why you can’t just send an asset directly to a pension. Then give it to trustee and then you wash your hands of it until your pension comes around.


Comments

  • #2
    ANXIOUS
    Registered Users, Registered Users 2 Posts: 3,095 ✭✭✭ANXIOUS


    Fol20 wrote: »
    Hey guys, I was just wondering what is the thinking behind being unable to transfer a house you own already to a self administered pension. I understand why you need to relinquish the management etc of it to a third party but I don’t understand why you can’t just send an asset directly to a pension. Then give it to trustee and then you wash your hands of it until your pension comes around.

    The most obvious reason is you'd not be paying any tax on the rent and could just build it up and then withdraw 25% of the total value of the pension down tax free up to €200k and then another €300k at 20%.

    An example you're left a house at 30 from your parents for €250k, this is under the threshold so you get it tax free you put it into the pension. You retire at 65 after getting 35 years rent of a €1000 month so €420k. At retirement you add the value of all the assets €420k + €250k = €670k you get 25% TF and the balance goes to an amrf/arf of which the rent continues to grow TF and you only have to take 4% per annually and can then pass that on to a spouse TF when you pass away.


  • #3
    Fol20
    Registered Users, Registered Users 2 Posts: 3,627 ✭✭✭Fol20


    ANXIOUS wrote: »
    The most obvious reason is you'd not be paying any tax on the rent and could just build it up and then withdraw 25% of the total value of the pension down tax free up to €200k and then another €300k at 20%.

    An example you're left a house at 30 from your parents for €250k, this is under the threshold so you get it tax free you put it into the pension. You retire at 65 after getting 35 years rent of a €1000 month so €420k. At retirement you add the value of all the assets €420k + €250k = €670k you get 25% TF and the balance goes to an amrf/arf of which the rent continues to grow TF and you only have to take 4% per annually and can then pass that on to a spouse TF when you pass away.

    I know the benefits of one of these types of schemes, i just dont understand why they dont allow you transfer a property you already own into a scheme instead of forcing you to buy another property directly to scheme. It seems like it will end with the same setup so i dont know why they dont allow them.


  • #4
    ANXIOUS
    Registered Users, Registered Users 2 Posts: 3,095 ✭✭✭ANXIOUS


    Fol20 wrote: »
    I know the benefits of one of these types of schemes, i just dont understand why they dont allow you transfer a property you already own into a scheme instead of forcing you to buy another property directly to scheme. It seems like it will end with the same setup so i dont know why they dont allow them.

    One reason as I've pointed out above is that you can gain vast amounts of wealth (change example to ten houses) and pay little to no tax.


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