Commercial property and self invested personal pension plans (SIPPs)

Year Published: 2011

As borrowing remains difficult in the current climate, there is an increasing trend of business owners taking advantage of using commercial property in Self Invested Personal Pension Plans (SIPPs).

A SIPP is the ideal way to release capital for a business. By selling a property to your pension fund instead of holding cash in it, business owners can inject hundreds of thousands of pounds in working capital into a business – a method which has become increasingly popular as the traditional bank remains elusive.

On top of this benefit, the rental on the property then acts as income into the business owner’s pension fund. The tax advantages of pensions have always made them an attractive form of retirement planning and for business owners the revelation that commercial property can be used to fund their pension plan is a tick in the right box.

It has also proved to be a popular method of raising the finance for business expansion or other investments. Even if a business owner doesn’t have enough to buy an entire property, using a SIPP to access the deposit fund in an economic era when banks are typically lending just 55 to 65 per cent of mortgages, is a great tactic to access finance without removing essential capital from the business’ purse.

As the turbulent times look set to continue, now is an ideal time to take advantage of the low commercial property prices that have been the result of fierce competition. This could be a good way to keep your business stable in the current economy or perhaps even expand into other locations by leasing or buying – and there are definitely bargains to be had.

One note of caution, this should be seen more long term as there may be restrictions in transferring the property back to yourself/your business later. We are happy to work in conjunction with your pension manager to ensure it is the best option for you. We work with all the leading pension providers in the area.

For further advice or information on SIPP’s or Commercial Property please contact Becky Simpson on 0844 391 5804.

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