Commercial Property SIPP
Benifits of a Commercial SIPP
Investing in commercial property may be a particularly useful facility for owners of small businesses, who can buy premises through their pension funds.
There are tax advantages, including no capital gains tax to pay, in using the fund to buy commercial property.
If you own a business and decide to use the property assets as part of your retirement planning, you would pay rent directly into your own pension fund rather than to a third party, usually an insurance company.
Ordinarily, a business property will, assuming that its value increases, generate a tax liability for the shareholders or partners. Unless, that is, you sell the property to your SIPP. Then the business can pay rent to your pension fund, on which it pays no tax, and any future gain on the property will also be tax-free when it is sold.
Where investment are made in commercial property, you may have periods without rental income, and in some cases, the pension fund may need to sell on the property when the market is not at its strongest.
For more information on investing in a commercial SIPP please speak to an independent SIPP pension advisors from one our partner firms.
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