Invest in commercial property with a SSAS or SIPP pension
There are two types of pension scheme that allow you to buy property. A Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS) can purchase commercial property as well as invest in commercial and agricultural land. Once purchased, the property or land can be let to your company or a third party. This gives rise to tax-free rental income and capital growth, with rental income paid into the pension scheme bank account.
What is commercial property?
Commercial property is buildings or land that are intended for business purposes and profit-making, as opposed to residential property.
Examples of buildings classed as commercial property include offices, office space, retail units, warehouses and factories, other industrial buildings, pubs, hotels, sports centres, hospitals, nursing homes, gyms and more.
Transferring to a SSAS or SIPP pension
Rather than making new contributions to a pension many of our clients transfer old employer pensions (final salary and money purchase) into SIPP or SSAS pensions that allow them to invest in commercial property. This is a simple process however it is important to have an investment plan so that you can decide on the right SIPP or SSAS scheme provider for you. If you are transferring a pension you also need to consider any benefits that you are losing. Click here to view HMRC rules
Our Services
Find a Pension
Establish a pension that allows you to invest in a property
Find Property
Identify a suitable property for your business or investment
Purchase
Buying a property within a pension is very similar to a personal purchase
Growth
Benefit from tax-free rental income within your pension
Commercial property, when purchased using a pension, has a broad meaning and includes land for development, high street premises, factories, car parks, hotels or pubs. We are often asked if it is possible to invest in residential property with a pension. Whilst a SIPP or SSAS should not invest directly in residential property, there are some exceptions. Care homes, hotels and designated student Halls of Residence are not treated as residential property.
There are also some job-related properties that are exempt, such as a pub with a landlord’s flat. The conditions for this type of investment are extremely strict though and require a number of criteria to be met in order to ensure that they are not inadvertently classed as residential property. For example, a shop with some flats above it, with their own entrance would not qualify but land for residential development is possible. Assuming that the proper planning permission is obtained, land can be developed, even into residential property, however, it must be sold from the pension before it becomes substantially operational if it is residential.
