Using your Pension to buy Commercial Property

Commercial property SIPP & SSAS tax efficiencies

If you have a Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS), you will be aware of the various tax efficiencies available to you. Investing in commercial property is a proven and allowable way to maximise these efficiencies, while also allowing for a more hands-on approach to retirement investment.

If you elect to sell the premises in the future, there is no Capital Gains Tax (CGT) to pay. Should you die, the property is held in a pension, and as such, it does not form part of your estate for Inheritance Tax (IHT) purposes. In addition, if your business encounters financial difficulties, holding the business premises in your pension protects it from business creditors.

If you are considering a commercial property SIPP or SSAS, we offer years of experience in acting on behalf of pension providers and members in managing their property portfolios.

“Caroline, you have been such a brilliant solicitor across everything, and so thorough. From one lawyer to another, I would definitely recommend you to others.”

Our experience

Whether you are buying or selling property, or granting or renewing leases for tenants, our expertise means that we understand the bespoke regulations surrounding pension fund investments and their strict requirements. Ultimately, this means we can streamline the whole process for you.

Many of our clients utilise a pension fund vehicle to acquire property for their own business use. We have the expertise and experience to advise on the entire transaction, from establishing the scheme (including the occupational lease) to advising the pension fund on the terms and ensuring adherence to all regulatory requirements – a true one-stop shop!

Please note that your pension fund can only buy commercial property – there can be no residential element whatsoever.

Commercial property SIPP & SSAS considerations

There are a host of considerations before proceeding with a commercial property SIPP or SSAS, including:

• First considerations. Does your current pension provider permit you to hold commercial property within the scheme? If they do not, a financial planner can help you find a more suitable provider. Next, are there sufficient funds within the pension for the intended property purchase? If not, how do you intend to raise the necessary capital? Can you increase the ‘pot’ by consolidating other pensions?
• Find a suitable property. This could even be a property you already occupy if your landlord is willing to sell.
• Who will occupy the property? Will your business be the sole occupier, or are you considering letting to third parties? If there are existing tenants, will they remain there? If so, it is crucial to check that any existing commercial tenancy is properly documented and on satisfactory terms.

If you are considering a Commercial property SIPP & SSAS, call us on 01225 462871 for a free, informal initial discussion.