Buying Property in a Pension
Commercial Properties can be bought/transferred into self-invested personal pensions (SIPPs) or small self-administered schemes (SSAS) as a tax-efficient way of investing your money.
Why is it becoming increasingly popular for investors to buy commercial property in their pensions?
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Income Tax and Corporation Tax
Any income received via the Property (e.g. rent) is tax-free, and if you have let the property back to your company, the rent will also be a tax-deductible expense for the company.
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Capital Gains Tax
Any profit made on the sale of any commercial property held in a SIPP/SSAS are free of capital gain tax.
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Inheritance Tax
Any monies and assets held via your pension fall outside of your Estate, meaning that no inheritance tax is payable upon death. This is a particularly useful relief for high net-worth individuals, that own multiple commercial properties, which would otherwise be subject to 40$ inheritance tax (in the absence of any relevant reliefs).
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Lending
There is a common misconception that you cannot borrow money under a pension. Subject to meeting certain criteria, SIPPS/SSAS’ are able to borrow money under commercial mortgages in order to invest in additional commercial properties.
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Joint Purchases
You are able to pool together with colleagues/business partners/family members in order to buy a commercial property together.
How can we help?
The Commercial Property and Real Estate Team at Lawson-West are based in both our Leicester and Market Harborough Offices, and regularly deal with transactions on behalf of pension administrators, trustees and accountants both locally and nationally.
If you require any legal advice in relation to acquiring/transferring commercial properties into your pensions, please do not hesitate to contact Lawson-West Solicitors today. We can put you in contact with all relevant professionals to assist you from start to finish.
Call us today on 0116 212 1000
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