This page answers the most common questions about tax-efficient property investment for company directors. It covers how a SSAS and a Family Investment Company can each hold property, the tax treatment of rental income and capital growth, and how property held within these structures interacts with pension and inheritance planning. For a view tailored to your own circumstances, speak to a TLPI tax planning specialist.
What are the tax advantages of holding commercial property in an SSAS?
Two main advantages: (1) Rental income received by the SSAS is not subject to Income Tax. (2) Growth in the property's value is not subject to Capital Gains Tax when the property is sold within the fund. Taken together, these can significantly increase the long-term return on a property investment.
Can a SSAS take out a mortgage to help buy a property?
Yes. A SSAS can borrow up to 50% of its net asset value to fund a property purchase. This means a fund of £400,000 could borrow up to £200,000, giving a total purchasing capacity of £600,000. The mortgage must be on commercial terms from a lender willing to lend to a pension scheme - the range of lenders has narrowed in recent years, but options exist.
What are the Stamp Duty Land Tax (SDLT) implications when a SSAS buys property?
A SSAS pays Stamp Duty Land Tax on commercial property purchases at the standard commercial rates. There is no blanket pension exemption from SDLT. The rates are 0% up to £150,000, 2% from £150,001 to £250,000, and 5% above £250,000 (for commercial freehold). SDLT is a cost of purchase and should be factored into the investment case.
Can a SSAS develop property?
A SSAS can carry out development work on property it already holds - for example, extending a commercial building or refurbishing an existing unit. Development from scratch (buy land and build) is possible but significantly more complex and must be carefully structured to avoid triggering trading income rules within the pension. TLPI would assess any development proposal in detail before advising.
What happens to the property in my SSAS when I die?
On death, the SSAS continues and the property remains within the fund. The deceased member's share of the fund passes to their nominated beneficiaries or remains for other members, depending on the scheme rules and trustee decisions. Beneficiaries do not receive the property directly - they receive a pension interest. This means the property can continue generating rental income for the next generation within the pension environment.
Note that the tax position is changing: from 6 April 2027, most unused pension funds - including a member's share of scheme-held property - will be included in the deceased's estate for Inheritance Tax, subject to exemptions such as funds passing to a surviving spouse or civil partner. Because the rules are complex and evolving, TLPI will advise on structuring nominations and succession appropriately.
Can a FIC hold residential property?
Yes. A FIC can hold residential investment property. Rental income will be taxed at Corporation Tax rates (currently 19-25%) rather than income tax rates of up to 45%, which can be more efficient for higher-rate taxpayers. However, there are complications: the Annual Tax on Enveloped Dwellings (ATED) may apply to high-value residential properties held in a company, and mortgage interest relief is restricted for companies owning residential property in certain circumstances. An SDLT surcharge also applies to residential property purchases by companies.
Is there Capital Gains Tax when property is sold from a SSAS?
No. Gains on assets held within a SSAS are free of Capital Gains Tax. This is one of the major long-term advantages of holding commercial property inside a pension - all of the proceeds from a future sale remain within the fund and can be reinvested or taken as pension income.
Can I use a loan-back from my SSAS to fund a property purchase personally?
No. A SSAS can only lend to the sponsoring employer - not to individual members personally. Using SSAS funds to lend to a member for personal property investment would constitute an unauthorised payment and trigger significant HMRC penalties.
How does owning property in a SSAS interact with my personal mortgage?
There is no direct interaction. The SSAS is a separate legal entity and its borrowings are not connected to your personal finances. However, some lenders do take into account pension fund assets or liabilities when assessing director personal mortgages, so it is worth flagging to your mortgage broker.
I am a buy-to-let landlord. Can TLPI help me?
TLPI specialises in tax planning for company directors rather than private landlords as such. However, if you are also a company director looking to structure your property holdings more efficiently - whether through a FIC, a corporate holding structure, or alongside an SSAS - we may well be able to help. A discovery call will clarify whether our services are the right fit.