HMRC rules and regulations for SSAS pensions

The rules referenced on this page reflect the position at time of writing (June 2026). Tax rules can change. Always verify the current HMRC position with a qualified specialist before acting.

The most important, and some would say ambiguous statement, is that of the asset being “suitable for use as a dwelling” In SSAS pension terms an HMO, serviced accommodation and holiday lets fall into this category as the building(s) could realistically be converted into a family home or homes, which in most cases was the original use of the property or properties involved.

With regard to permissible property an example of HMRC’s definition of these are:

• A home or other institution providing residential accommodation for children as a dedicated children’s home A hall of residence for students. This does not include normal houses or flats let to, for example, university students
• A home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disability, dependence on alcohol or drugs mental disorder
• In the event that the asset to be purchased is vacant or derelict then HMRC’s guidance is that you must look back at the last time it was used. If it was last used for one of the non-residential purposes set out above then it is not treated as residential property. If the building has never been used and is more suitable for one of the uses specified above than for any other purpose, it is not treated as residential property regardless of their suitability for use as a dwelling.

This brings us on to the purchase of property with the intention of change of use and commercial to residential conversions. This can be a bit of a minefield and is an area which should only be entered into when fully informed and prepared.

When purchasing a property which is deemed as commercial through a SSAS pension scheme, the full available funds can be utilised and in addition up to 50% of the fund value can be raised with an external lender for this purpose. It is imperative that this asset is never deemed as residential whilst owned within the pension fund. As such, the timing and disposal of an asset is key and whilst the SSAS pension funds are an invaluable tool for the initial purchase of the property, a robust exit strategy is essential when considering this type of venture as is mentioned in the HMRC rules:

“A property that is sold before the development or conversion is substantially completed never becomes residential property”

The rules for this kind of development are explained in the HMRC guidance below:

• Whilst it is in the course of construction, conversion or adaptation such land and property is not residential property because during that period it is not suitable for use as a dwelling.
• Land and buildings being converted are treated as residential property from the point when they become suitable for use as a dwelling.
• In any specific case this point should be determined by taking a common sense approach to the facts and circumstances. Essentially the question to be answered is: would a person normally live in that dwelling?
• The point at which this occurs will normally be when the works are substantially completed. In the case of UK property this is likely to be when the certificate of habitation is issued.

In summary, the ability for company directors to take control of their pension funds through a SSAS pension and invest in their property businesses is an option which more and more people are taking advantage of. That said, it is important to ensure that you deal with experienced professionals such as TLPI during this process, from the initial establishment of the pension scheme through to HMRC registration, transfer and purchase and investment decisions.