Selling a fractional interest in a resort property as an investment is by no means an easy route to market. However, some shared ownership developments, both overseas and in the UK, have all the attributes of a commercial property as defined by the United Kingdom‘s HM Revenue and Customs service. This means that fractional shares in appropriate structures could be sold as investments known as Self-Invested Personal Pensions (SIPP) - UK tax payers who choose to contribute to their pensions through a SIPP fund get full tax relief making this way of saving for retirement extremely popular.
SIPPs - the largest pension pool in Europe, the latest statistics which quantify the potential market are as follows:
- 500,000 schemes
- £60 billion funds under management
- Average value of a SIPP £120,000
- 20% of an average fund is typically allocated to commercial property
Effectively, this form of fractional sale would benefit a developer who has a very strong resort management background as investors seek a return on rental yields rather than usage, in fact, SIPP rules do not allow the investor to use the property at all.
