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Pension Scheme Property Purchase

Pension Scheme Property Purchase

The client is a small Limited Company with three directors. The Company owns a commercial property from which the business is run. The Company would like to raise some money for business expansion and improve their liquidity.

Client Circumstances

  • Company owns property valued at £600,000
  • The limited company wants to expand but is finding it difficult to get funding in the current climate
  • They are also keen to increase their liquidity
  • The three Directors have pension funds valued at £250,000 each
  • Currently they are in a range of insurance company funds from different insurers with no clear strategy.

Recommended Solutions

  • Directors set up a SIPP
  • Ltd company sells the property to the SIPP
  • Remaining portion is invested in funds suited to the individuals’ attitude to risk.

Benefits from advice given

  • Liquidity of £600,000 now available to the Ltd Company for business expansion.
  • Rent from the company is paid into the Directors’ SIPPs, providing regular pension input.
  • Rent paid into the SIPP by the company should be tax deductible for the business and is received tax free by the SIPP.

Title here

Pension Scheme Property Purchase

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This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.

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