Pension Property Purchase

Many clients and business owners are interested in purchasing their existing or new business premises using their (or grouped) pension funds. We have detailed 2 options below. Talk to Churchouse Financial Planning Limited about your requirements.

Small Self Administered Pension Scheme (SSAS)

A money purchase occupational pension arrangement designed to allow greater flexibility in the way the scheme assets are invested. In our experience, this flexibility is usually used to purchase the commercial premises used by the business. It is a highly tax efficient way of benefiting from any potential capital growth of the property and commercial rent paid into the pension to benefit the member(s). The scheme can also borrow to achieve the purchase. The rules for these schemes can be complex and full ongoing advice will be needed to achieve the full potential of the scheme.

You will also need to take legal advice to complete the purchase.

Self Invested Personal Pension Schemes (SIPPS)

Using personal pension legislation, these schemes are becoming mpre popular due to the significant changes at pensions ‘A’ day.

Presently, as with SSAS, SIPP’s can be used to purchase commercial property, but from April 2006 the scope of investment for most pensions increases significantly.

Again, full advice will be needed to ensure that the advantages and risks of these types of scheme are considered to ensure that you as employer/employee are gaining the full potential from your arrangements.

An example of one restriction that has disappeared is the issue of connected parties.

By 75 at the latest, the pension fund will need to be converted to provide an income for the rest of your life. This no longer has to be by the use of annuity and introduced a new concept referred to as Alternatively Secured Pension (ASP). As this plan provides some additional flexibility over annuity purchase we would recommend that you speak to your Independent Financial Adviser to check how this could affect your future income strategy.

The level and basis of reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor.

Churchouse Financial Planning Limited are well placed to help you with these issues and we look forward to hearing from you.

Please note that this is for guidance only and we recommend that you seek further advice from an Independent Financial Adviser before proceeding further. The Financial Services Authority does not regulate taxation advice.