Gordon Brown is a serial offender. Master of the U-turn. And every time he does turn he blames other people for the financial chaos he has caused.

We all know about the debacle over the abolition of the 10p tax rate and the criticism heaped on Gordon Brown. Rightly so. He only has himself to blame.

It was Brown, as Chancellor of the Exchequer, who introduced the 10p starting rate. He did so as a cynical political measure and for year’s trumpeted what a success it was. It could only work if the complex tax-credit system actually worked – and we all know that has been a disaster with people over-paid, underpaid and forced to the point of desperation trying to deal with officials who couldn’t understand the system themselves. What Brown should have done is simply raise the tax free allowance. But no, social engineer Brown didn’t want such a sensible solution – he and his party want to control people and make them depend on the State. Brown also saw it as a vote-winning strategy.

The whole scheme backfired when he abolished the 10p rate as the price of lowering the standard rate of income tax from 22% to 20%. Unfortunately for Brown he couldn’t do his sums properly and ended up hurting the low paid – the very people he and his party claim to want to help. As a result, and in a desperate attempt to win the Crewe & Nantwich By Election (which of course he did not) Brown finally came up with the answer – raise the tax free allowance. Hmm. How much pain and financial loss – both to individuals and the public purse – could have been saved if he had just done that in the first place?

But that is only one of Brown’s classic c**k ups. In the last 10 years this serial offender has announced more financial measures which have subsequently had to be abandoned or reversed – again at massive cost – than all the 20th century Chancellors put together.

This isn’t the place to detail them all but there is one which is relevant to anyone interested in investing in property. Yet, despite the debacle there may be a possibility that all is not lost. Read on.

Hurrah for “A” Day

In his Spring 2005 Budget Gordon Brown, then Chancellor of the Exchequer, announced that as from 6th April 2006 (“A” Day) UK residents would be able to use their Self Invested Personal Pensions (SIPPs) to invest in a range of assets including residential property, holiday homes, classic cars, fine wines and art & antiques. This would effectively subsidise purchase of rental property by at least 22% and help provide the thousands of new homes that the Government wanted building.

However in November 2005 BROWN made one of his classic U-turns

Announcing the reversal of his previous announcement Brown declared that using a pension scheme to invest in “prohibited assets” (residential property, holiday homes, etc as above) would not only not be allowed but would be classed as tax avoidance! As he proposed the changes to allow investment in such assets in the first place I can’t see why or when it changed from being acceptable to being illegal!This u-turn caused chaos. Pension providers had invested millions in developing and marketing schemes to meet the announced requirements. Developers commenced new developments and speeded up completion of ones already being built in order to meet the expected demand. Estate agents, lenders, investors and others geared up for what was called “A” day were left high and dry. Millions had been spent on getting ready for “A” day and all went down the drain. Bad enough but without the tax advantage many investors found that the figures for rental v mortgage just did not stack up and their lenders backed out – leaving them unable to complete the purchases and so loose their deposit. But that wasn’t all – prices for new build property started to drop and people who has invested in off-plan property with a view to selling on completion found that their equity had hardly risen or in some cases had actually fallen.

A total disaster – caused by Gordon Brown. You know if a financial business did something like that they would be sued and the directors probably sent to prison. But if you are a Labour politician you just walk away.


Yes. There is no doubt that the disastrous u-turn by Brown has contributed to the property crash and in no small measure to the Northern Rock debacle. Why do I mention Northern Rock? Well, they were a major lender to the buy-to-let market, particularly at the risky non-status end of the market. However most people now feel that whilst the residential property market in respect of sale of family homes still has a way to fall, the buy-to-let market is probably at the bottom of the cycle and now is a good time to buy – particularly if you can get tax relief via your pension.

And you can.

There are various ways one of which may suit your particular circumstances.

For example if you have earnings outside of the UK you can invest via offshore pension plans which also don’t force you to purchase an annuity and which grow without any taxation within the plan. (Don’t forget that Mr Brown abolished tax relief for profits made by pension plans almost before he got into office 11 years ago.) And here we are with offshore schemes which don’t tax the profits and which allow investment in most of Mr Brown’s “prohibited assets”.

If you don’t have earnings outside the UK all is not lost. There are a range of allowable investments for your pension plan which do allow indirect investment in all the prohibited assets.

Click here to contact me for more information.

I am not a regulated financial advisor and so cannot provide details of any of the above plans but I can, and will, introduce you to a Chartered Financial Advisor authorised in the UK, Isle of Man, Channel Islands, Switzerland and most of the EU for him to see if he can help you.

This article appears on my other website www.jamesgreenandco.co.uk where you can find lots of advice and information about investing in property in the UK and overseas. Do visit it and have a browse around.

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