Purchasing a commercial property using your pension scheme can be an effective use of your funds, with certain tax, finance and business benefits, provided that you receive the right financial advice and back this up with the right legal advice.

If you are considering purchasing a property using your pension scheme, or selling or leasing a property from your pension fund, we are here to help and advise you.  This is a complex area with specific regulatory and other requirements that make this type of legal work very specialised.  Here, our experienced Commercial Property Investments team explains the answers to several of the most frequently asked questions as well as exploring further how we can support you.

What is a Self-Invested Personal Pension (SIPP)?

A Self-Invested Personal Pension (SIPP) is a UK government-approved personal pension scheme which allows individuals to make their own investment decisions from a range of investments approved by HM Revenue and Customs (HMRC).

Having a SIPP gives you a degree of flexibility and control as you are making decisions and managing your pension yourself.  If you are concerned about your time or knowledge in this area, you can appoint an investment manager to work as a trustee on your behalf.

What is a Small Self-Administered Scheme (SSAS)?

A Small Self-Administered Scheme (SSAS) is a type of UK Occupational Pension Scheme. Schemes are trust-based and established individually, usually by directors of limited companies for directors and specified employees of the company.

In comparison to a SIPP, the control over the pension lies with the trustees of the scheme, i.e. the directors of the company.  The number of members within the scheme can vary, and can even just be one member who is looking for the opportunity to use their pension to invest in their business or in property.

Can I use my pension to buy a property?

Commercial property, for example offices, warehouses, restaurants, retail units, and some types of land can be purchased using a SIPP, depending on the SIPP provider, or a SSAS.  The property or land can either be purchased outright or by taking out a mortgage against your pension.  It is also a possibility to jointly purchase a property with another person or entity if your scheme does not hold enough funds to purchase individually.

Why use our Commercial Property team for your pension property investment?

With over 35 years of combined experience of working with pension property transactions, our Commercial Property team are best placed to advise you, providing you with the skills, knowledge and expertise you would expect from your chosen legal advisors.

We always provide our clients with first class, transparent advice which is particularly pertinent in this area of law, and we can support you in the following ways:

  • Open communication – typically, numerous parties are involved in pension transactions and we know that you will be keen to stay on top of progress, which is why we will regularly liaise with professional pension trustees, private pension investors, independent financial advisors and lenders to keep the transaction moving and progressing.
  • Our network – We work with professional pension providers of all sizes, including some of the best-known providers in the UK. We are also designated panel solicitors for some SIPP schemes. This means we are fully conversant with the requirements and regulations of pension providers and can therefore provide you with an efficient, tailored service to meet these needs.
  • Tailored precedents – To speed up transactions we have already carefully created documentation that meets all of the pension trustee’s main requirements. This should avoid the need for further amendments down the line in a transaction, avoid delays, and also makes us cost efficient.
  • Proactive – We will be able to comment on the proposed terms of a transaction very early on and let you know whether the terms are compliant with the requirements of your chosen SIPP provider.
  • Practical and use our initiative – To expedite transactions further, we will accept instructions from the pension investor and commence work whilst we await formal instructions from the professional pension trustees, provided that the investor signs our terms of business and agrees to be liable for fees in the event that the matter subsequently doesn’t proceed, or trustee instructions are not received.
  • Supporting legal advice – We can help you to structure your pension investment to meet pension regulations. A typical example is when a property contains a residential element which cannot be kept within the pension scheme.
  • Our jurisdiction – We can act on property investments located anywhere within England and Wales.

Examples of our previous work in pension property investments and purchases

During our many years of working within this field, we have worked with a wide variety of investors and their portfolios, ranging from:

  • Purchases of property into, and sales of property out of, pension funds.
  • Transferring properties between pension funds (in-specie transfers).
  • Leasehold property management including leases, licences, surrenders, assignments, subletting, and other management requirements.
  • Borrowing against and securing charges over pension property.
  • Property litigation support.
  • Should there be insufficient funds in a SIPP and SSAS pension scheme to purchase a property, we can advise on joint ownership where the property is acquired jointly with a pension fund member or their company.
  • Advising on the structure and purchase of mixed use properties.  An example of this would be a property which is commercial use on the ground floor and residential flats on the first floor, with the pension scheme acquiring the commercial premises only on a long lease and the pension fund member or their company acquiring the residential elements (freehold).

Contact our Commercial Property Solicitors

To discuss your investment and pensions plans for the future, contact a member of our Commercial Property team based in our offices in AndoverRomseySalisbury or Witney. You can get in touch using the Contact Form, emailing moc.n1709424471ellub1709424471rekra1709424471p@ofn1709424471i1709424471 or calling your local office from the numbers below:

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Your SIPP & SSAS Pension Property Investment Services Team