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<p>While the current tax rules impose no direct restrictions on the types of assets
that Self Invested Personal Pensions (SIPPs) can invest in, SIPPs will incur tax charges
if they acquire certain assets, such as residential property. This is to prevent individuals
from using tax-relieved funds to acquire property that could be of personal use, rather
than to secure future retirement income.</p><p> </p><p>However, SIPPs are able to
indirectly invest in residential property through collective investment vehicles such
as Real Estate Investment Trust (REITs), where sufficient diversity of ownership and
assets prevents the possibility of private use of the assets.</p><p> </p><p>The legislation
aims to strike a balance between allowing these pension schemes to invest in a wide
range of assets, and the need to protect both tax relief on pension contributions
and investment returns from potential abuse.</p>
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