Why transferring property into a SIPP or a SSAS could help businesses weather the COVID pandemic
With many people being hit hard by the COVID pandemic, it is important for businesses to have the funds, as well as the insight, to be able to adapt to the new ways of working, whether this means buying new equipment or making changes in order to comply with the new regulations. Traditional borrowing can be a challenge, especially in the current financial situation, and pensions can of course be a potential source of funds.
Whether it is to inject cash into your business or for other reasons, many people are currently looking towards a SIPP (Self-Invested Personal Pension) or a SSAS (Small Self-Administered Pension Scheme). And if you or your business owns a commercial property, this could be an attractive option right now. Likewise, this option 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 you to save for your retirement in a tax efficient manner, but can also give you a much needed cash injection in order to grow your business.
Business owners are seeing many benefits to transferring their property into a SIPP, including:
- Much needed cash injection
- Rent paid into the SIPP (less any loan repayments), generally grows free of income tax and capital gains tax
- When paying into 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 property into a SSAS include:
- Much needed cash injection 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
At Yorsipp we are currently running a special offer on SIPP and SSAS plans, available until the tax year end. If the current market and pandemic is impacting on your business and you want to look at your options to allow for a cash injection into your business, then please speak to your financial adviser and consider transferring your commercial property into a SIPP or SSAS.
*Please see our website or contact us for full terms.
Our special offer fee structure can be downloaded here.