Why A Property SIPP Can Be Very Rewarding
Buying commercial property with pension savings is a popular choice due to the income generated and often low capital value volatility. Whilst both rental streams and capital values are subject to market fluctuations, direct investment in land and commercial property remains an attractive proposition for many SIPP investors.
Your SIPP Can Directly Hold Commercial Property
Many business owners benefit from tax free rental income and capital growth through buying their trading premises with their SIPPs. Not only does it provide security of tenure for the business, it's a tax efficient exercise for the SIPP too.
In essence, your pension fund directly owns a commercial property. It can be the property from where your business trades. Or you can let it to a business with which you have no connection.
5 Potential Benefits Of Creating A Property SIPP
Here are the top 5 reasons for having a property SIPP.
1. Capital Gains Tax Free Property Growth
Any growth in the property value is free from Capital Gains Tax. So if your property appreciates in value, no Capital Gains Tax is payable.
2. Tax Relief For Business Use
If your business is leasing the property from your SIPP, the rent your business pays is an allowable business expense.
3. Tax Free Rental Income
If your SIPP charges £1,000 in monthly rent to a business using your commercial premises, that £1,000 payment would not be subject to any tax because it's reinvested in your SIPP.
4. No Inheritance Tax Liability
If you die, the property invested in your SIPP should be fully exempt from Inheritance Tax. Inheritance Tax is normally payable on property held outside of a SIPP.
5. Your SIPP Can Borrow
If you don't have enough money in your SIPP to purchase the property, your SIPP can borrow up to 50% of the value of your pension fund to complete the purchase.
Only Members Can See Exactly How To Create A Property SIPP
Discover How To Profit From A Property SIPP
Full information about creating a property SIPP is available to members only. Please select one of the buttons below, so you can see how a property SIPP can benefit you.
As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk. Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.
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