Remortgages

The new system will allow any person paying British tax to invest tax-deductible funds of his or her choice into self-invested personal pensions (Sipps). A whole year's income may be invested this way and the money used to buy property or other assets in South Africa. All rent earned from the property will be tax-free. Sipps, which will be implemented in April next year, raised a lot of interest at an event organised by International Property Solutions in Chelsea earlier this month. IPS assists South Africans to invest their savings in property back home, instead of in low-interest bank accounts. South Africans stay in London for an average of about five years, said IPS CE Scott Pickens."The new flexibility of Sipps gives them a way to boost their earnings by making them tax-free and buy SA properties at a large effective discount," he explained to media people who attended the seminar together with about 200 South Africans.An estimated 750 000 South Africans -most of them between 20 an d 30 years old - live in London alone and will stay for an average of about five years. It is expected that the new tax incentive will encourage a large number of them to buy property in South Africa.When they return to South Africa they will have a tax-sheltered offshore trust to which they will be able to contribute until they are 55, if they reach this age after 2010.Tax experts explained that the law is being changed because the British government, like other European governments, is concerned about the increasing pension burden it will be facing as people reach a higher age. The new system will enable more people to be independent when they retire.

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