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21/04/2021 Miscellaneous

Strategic business moves: Transferring property into a SIPP or SSAS

As we look to the future, transferring commercial property into a SIPP or SSAS can be a smart business move. Nobody could have predicted the length or the impact of COVID, and it is only now that many businesses are starting to see light at the end of the tunnel, as the business world looks to open again. People are reviewing their business strategy and many will be looking at their options and routes to invest in new projects, which is why Yorsipp are extending their offer on SIPP and SSAS plans until the end of September.

Businesses need to have the funds and insight now more than ever, in order to be able to adapt to the new ways of working. Traditional borrowing is still a challenge and many business owners can benefit from tax free rental income and capital growth through buying their commercial property through a SIPP or SSAS. For connected transactions, the sale means a transfer of funds to your clients’ business which could allow them to invest in new projects – a welcome opportunity for many businesses who have suffered at the hands of the pandemic.

This option is available if your client or your client’s business owns a commercial property and is also applicable for unconnected properties, whereby you buy a commercial property that is on the market, whether for your own business or an unrelated business opportunity. The majority of commercial properties – retail buildings, offices, industrial spaces, hotel and even leisure facilities – can be held or transferred into a SIPP or a SSAS. These pension plans allow your clients to save for their retirement in a tax efficient manner, and can also be a strategic move to grow their business. 

Business owners are seeing many benefits to transferring their property into a SIPP, including:

  • Funds for business projects
  • Rent paid into the SIPP (less any loan repayments), generally grows free of income tax and any growth in the value of the property is generally free from capital gains tax
  • When contributing to a SIPP, individuals receive government tax relief (within HMRC limits)
  • Greater flexibility and control over investments
  • On-going investment to save for later years
  • Opportunity for part purchase
  • Opportunity for syndicate purchase options, allowing greater purchasing power, but still permitting each member of the scheme to manage their own plan and retain their own investment choices

A SSAS is generally set up to provide retirement benefits for a small number of a company's directors and / or senior staff and is a very popular option for family owned businesses.

Advantages of transferring a commercial into a SSAS include:

  • Transfer of funds back into the business
  • Scheme can make a loan back to the sponsoring employer who can use the proceeds to invest in their business
  • Allows greater flexibility & fluidity through family generational changes in the business
  • Tax reliefs (within HMRC limits)
  • All investments are owned at scheme level which may aid succession planning

If you are a financial adviser with clients whose businesses have been affected by the pandemic and you would like to discuss their options, please speak to our Business Development Manager, Stephen Gilligan today on 07500957520 or email him at Stephen.gilligan@yorsipp.com

 

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Our special offer fee structure can be downloaded here. 

 

This article is intended for use by FCA regulated financial advisers and is not intended for direct retail clients.  If you are a direct client then Yorsipp will only accept SIPP applications through an FCA regulated financial adviser or for SSAS applications will only accept applications, through a financial adviser and/or a Chartered Accountant.

 

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