Reits ''are the right way to go''

If you are looking to invest in a property as part of a Self Invested Personal Pension (Sipp) then a Real Estate Investment Trust (Reit) would be a safer option, according to one financial expert.

Although residential property is banned from being part of a Sipp, many firms have launched schemes which exploit loopholes in the legislation such as Pierre et Vacances, who were the first company to leaseback properties in ski resorts for Sipps.

Anna Sofat, director of financial advisors AFS Wealth Management, said: "Reits and mainline property funds are definitely safer and more accessible and you can buy and sell - they are much more liquid."

Reits are tax-efficient vehicles for property investment and allow firms to invest in property on behalf of individual investors so that individuals don''t have the risks of complications of direct ownership.

Companies will have to hand back 95 per cent of net profits to investors but don''t have to pay corporation tax.


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