This is one of the most common questions we get asked by business owners and directors. Should you, your partnership or company want to buy commercial property, it is possible to use funds from a Self Invested Personal Pension or Small Self Administered Scheme. So, it can be done, but whether or not it’s right for you depends on YOUR retirement planning and YOUR personal financial plan.
These pension plans can even borrow money with a commercial mortgage to help buy a property worth more than the value of the pension fund.
Once purchased, the property is then owned by the pension fund. If it then grows in value, this growth is free of income or capital gains tax. Any rent payable on the property by you, the company or partnership can reduce the company tax bill as it is treated as a business expense.
The return on your investment is the rent into the pension scheme and any growth in property value less charges.
Furthermore, because the property is held in a pension, there is no need to pay any tax on rental income, capital gains or any profit generated by a sale. Any income that you draw from your pension whilst retired is taxed.
SIPP Commercial Property
Several SIPP’s can join together to jointly own a property. A SIPP can also jointly own a property with individuals and/or companies.
This is a complex area so please download our guide for further information or contact us direct to discuss your particular situation.
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