HMRC confirm limits on SIPP borrowing prevent remortgaging

Prior to April 2006, SIPPs had the facility to borrow up to 75% of the value of any property being acquired within the SIPP. Changes to legislation now restrict this to 50% of the assets of the SIPP on the day immedaitely prior to the borrowing .

Many commentators are advising that any pre April 2006 borrowing can be "remortgaged" with another lender provided the original loan balance is not exceeded. However HMRC have stated that by remortgaging, the original pre April 2006 loan is repaid and a new loan, subject to the post April 2006 is being acquired to which the new restrcited loan criteria apply. The only method of remortgaging is to assign the original loan to the new lender but this of course requires the specific cooperation of the old lender.