Benefit from tax free rental income and capital growth by acquiring commercial property in a pension.
The great thing about investing in property with a pension is the two forms of income – Capital Value and Rental Income are tax-free.
Commercial Property
There are two types of pension scheme that allow you to buy property. A Self Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS) can purchase commercial property as well as commercial and agricultural land. Once purchased, the property or land can be let to your company or a third party. This gives rise to tax-free rental income and capital growth, with rental income paid into the pension scheme bank account.
Rather than making new contributions to a pension many of our clients transfer old employer pensions (final salary and money purchase) into SIPP or SSAS pensions that allow them to invest in property. This is a simple process however it is important to have an investment plan so that you can decide on the right SIPP or SSAS scheme provider for you. If you are transferring a pension you also need to consider any benefits that you are losing.
How you can buy property using your pension
Find a Pension
Establish a pension that allows you to invest in a property
Find Property
Identify a suitable property for your business or investment
Purchase
Buying a property within a pension is very similar to a personal purchase
Growth
Benefit from tax-free rental income within your pension
Commercial property, when purchased using a pension, has a broad meaning and includes land for development, high street premises, factories, car parks, hotels or pubs. We are often asked if it is possible to invest in residential property with a pension. Whilst a SIPP or SSAS should not invest in residential property, there are some exceptions. Care homes, hotels and designated student Halls of Residence are not treated as residential property.
There are also some job-related properties that are exempt, such as a pub with a landlord’s flat. The conditions for this type of investment are extremely strict though and require a number of criteria to be met in order to ensure that they are not inadvertently classed as residential property. For example, a shop with some flats above it, with their own entrance would not qualify but land for residential development is possible. Assuming that the proper planning permission is obtained, land can be developed, even into residential property, however, it must be sold from the pension before it becomes substantially operational if it is residential.
Key Benefits
- Tax-fee property investing
- Benefit from capital gains
- Lease property to your own business
- Benefit from rental income
- Costs and payments are payable by pension
- Extensive investment opportunities
This is a technical investment and we have the experience to help ensure that the SIPP and SSAS property investment rules are not broken.
A SIPP or SSAS pension can also borrow 50% of its value to help with the purchase of property. A SIPP loan or SSAS loan can be from a bank or any third party investor. A SIPP or SSAS can also combine its value with other family members to create a larger potential purchase price. We often help a husband and wife combine their pensions, it is also possible to pool the pensions but to keep the benefits separate. We are able to offer the best property SSAS pension advice, tools and knowledge to support your strategy.
Pensions less than £100,000? We can still help.
If the total pension value is less than £100,000 then there may not be enough to make a direct commercial investment however this should not stop you from using property as the investment to grow your pension. Our investment page has a comparison chart detailing some of the leading Property Bonds and also property crowdfunding investments. Investments like these can be used in a 2 step process to acquire your own commercial property or land.
For example, a 5-year investment in a Property Bond could return growth for your pensions, creating a much larger pension fund and substantial enough to acquire a property investment. This is a strategy many of our clients use.
We have helped many people to turn their old, poorly performing pensions into a valuable pension by investing it in property.
Want your questions answered by our expert SSAS and investment consultants?
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What our clients say
Recently been working with Tom at the Landlords Pension through a recommendation from a close friend. Tom is very knowledgeable and explained their services very clearly. Really helpful and friendly guy who immediately put me at ease. Always at the end of the phone or email ready to answer any questions I have.
Janine Rose
November 2020
Highly recommend The Landlords Pension for setting up a SSAS pension. Many Thanks to Liam, Michelle, Teresa and the team for their support throughout and making it an easy process. Looking forward to our working relationship with future investments.
Matthew Martin
August 2020
Wouldn’t hesitate to recommend there services to open a SASS, massive thanks to Dan, Michelle and Teresa who made the setup seamless, very supportive throughout the whole process.
Look forward to many years of successful investments with The Landlords Pension
Angela Woods
July 2020
Highly recommend The Landlord’s Pension for opening a SSAS. They are highly professional yet friendly and personable. They are really helpful and keep you informed every step of the way. It’s refreshing to pay for a service by a company who actually do what they say they are going to, with zero aggravation and problems! Thank you guys 🙂
Vicki Prosser
February 2020
I recently opened my SSAS through The Landlord’s Pension and they have been professional, approachable and efficient throughout. Simon, Teresa and Michelle have all been great in answering my questions and queries and doing their best to ensure the process of transferring over my existing pension has been a smooth and seamless one. I would have no hesitation in recommending them.
Steve Brazil
January 2019
I’ve been working with The Landlord’s Pension this year to sort out historically messy pension arrangements and take control by creating a Family SSAS. Chris Brown has been an absolute pleasure to deal with, friendly professional advice all the way through. Thanks!
Ray Georgeson
03/12/2020
We had a number of workplace and final salary pensions, dotted all over the place and decided to pull them all into one SSAS. Laura and the team were excellent in explaining what to expect and keeping us advised every step of the way, in fact as part of the fact-find, we came across pensions we didn’t realise we had! I manage my own SSAS, but I know that Laura is at the end of the phone if I need her and she will not hesitate to help. I couldn’t recommend The Landlord’s Pension enough, they were absolutely brilliant!