Our partner-led, multidisciplinary team offers a truly committed and lasting partnership with our clients, across all of our East of England offices.
View all team
When buying, selling or letting commercial property through a pension scheme you need a team who are experts in dealing with the complexities of investing property in a pension scheme.
SIPP and SSAS pension schemes are an extremely popular choice for clients, largely due to the substantial tax advantages, among other benefits, making these schemes increasingly popular with those planning for the future.
When buying, selling or letting commercial property through a pension scheme you need a team who are experts in dealing with the complexities of investing property in a pension scheme.
If you are looking to invest in a pension scheme through the purchase of commercial property, then please contact one of our experts. We can provide advice to ensure your investment is properly protected. We will identify any legal issues that could arise at the time as well as those that could arise further down the line and ensure all legal documentation is in place to provide you with comfort and piece of mind.
There are two mechanisms for buying property through a pension, a SIPP or a SASS. Through these vehicles you can buy commercial property either to use as a business premises and lease it back to the company, or as part of an investment portfolio. These schemes will usually be set up by your insurance company or a specialist pension provider.
Our commercial property experts have extensive experience of pension property investment and liaising with pension providers to ensure you are fully advised on the most beneficial structure to protect your interests, including :-
Buying or selling commercial property into a pension fund
Leasehold management, including dealing with leases, assignments and sub-letting
Securing mortgages against pension properties
Transferring properties between pension funds
Advising on and documenting trustee’s obligations
Advising on lease renewals, dilapidations, recovery of rents and any property dispute you may become involved in, such as right of way disputes
Have a different question?
Get in touchA Self-Invested Personal Pension Schemes, or SIPP, is a personal pension plans that allow you the flexibility to decide what forms part of your investment portfolio. SIPPs are often defined as a ‘pension wrapper’ which allow you to invest various securities including commercial property and land in your pension scheme which you can later draw upon during retirement.
A Small Self-Administered Schemes, or SSAS, is an occupational pension scheme often set up to enable the directors and employees of a company to use their pension plans to invest back in the business. These schemes are established under a trust, with investment decisions being made by the appointed trustees.
Investing through these pension vehicles has several benefits, including:
It is usual for the property to be tenanted and for the rent to provide a regular income into the pension plan, which is free from income tax.
Any outgoing rent is an allowable expense for corporation tax purposes.
The sale of property does not attract any capital gains tax.
Personal insolvency will not affect property owned under such a scheme.
Assets owned under the scheme will fall outside of your estate for inheritance tax purposes (subject to certain exceptions).
Lenders may grant a loan of up to 50% of the net asset value of the pension scheme.
Investing in commercial property through a Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS) offers significant tax efficiencies and financial flexibility. Rental income paid into the pension scheme is exempt from income tax, and rental expenses incurred by your business are typically tax-deductible for corporation tax purposes. Furthermore, any capital growth realised when selling the property is generally exempt from Capital Gains Tax. You can also choose to lease the premises back to your operating business or hold it as part of a wider commercial investment portfolio.
Pension schemes are permitted to borrow funds to assist with purchasing commercial property, with lenders able to provide a loan of up to 50% of the pension fund's net asset value. Our commercial property experts assist pension trustees, providers, and business owners with every legal aspect of property management. This includes structuring mortgage charges, drafting and renewing commercial leases, managing property transfers between pension schemes, handling sub-letting or assignments, and resolving property disputes such as rent recovery or dilapidations claims.
Holding commercial property within a SIPP or SSAS can form a key component of long-term business succession and estate planning. Because assets held inside a pension wrapper sit outside your personal estate for Inheritance Tax purposes, they can often be passed on tax-efficiently to designated beneficiaries or remaining scheme members. However, to ensure your overall retirement and estate plans align seamlessly, it is vital that pension expressions of wish are regularly reviewed alongside an up-to-date Will. Our commercial property and private client teams work together to ensure your property investments, pension trusts, and Will are fully synchronised.
If you have any enquiries please contact any one of our specialist team who would be pleased to advise you on your options. You can also contact your lawyer individually from ‘Our People’ using the link below.
Our team
Ellisons is a trading name of Ellisons Legal LLP. Ellisons Legal LLP is authorised and regulated by the Solicitors Regulation Authority (SRA Number 8001031) | © Ellisons
