Commercial Property and SIPPs
Commercial Property
By Kieran Quinn
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Commercial Property and SIPPs - Investing in Your Future

We will work alongside you and your tax advisor to facilitate and advise on the appropriate options to meet your requirements.

What Can You Invest in Using a SIPP?

Using a SIPP provides you with the freedom to make smart investment choices tailored to your specific aspirations for retirement as well as your tolerance for risk.

SIPPs allow you choose from various investment types, including but not limited to:

This article will focus on how you can take control of (and enhance) your retirement fund by wisely investing in commercial property using a SIPP.

Purchasing Commercial Property and SIPPs

Why invest in commercial property using a SIPP?

Tax advantages:

  • Where you purchase a commercial property to be used as your own business premises, the commercial rent rate payable by your business will go into the SIPP.

  • The rental income received by the SIPP is also generally free from income tax.

  • The property may increase in value over time and if you eventually sell the property at a profit, you will not have to pay any capital gains tax – this is a huge benefit!

  • Commercial property owned via SIPPs are not included in the owner’s estate for inheritance tax purposes.

  • Your commercial property is protected if you are declared bankrupt.

What Else Do I Need to Know Before I Purchase Commercial Property Using SIPP?

It is important to note that not all SIPPs can be used to purchase commercial property so it is important that you seek advice from your tax advisor so that they can advise you on the most appropriate SIPP provide to meet your needs.

Advantageously, HM Revenue and Customs (HMRC) regulations enable you to invest in all types of commercial property using SIPPs, including offices, pubs, shops etc.

Please note that you cannot own a residential property through a SIPP, this extends to commercial property which hold a residential element to it (e.g. care homes).

Finally, although there are numerous benefits to purchasing commercial property using SIPPs, it is worth noting that if the commercial property depreciates in value, you will receive less than you initially invested (if you decide to sell at that point).

How Can I Purchase Commercial Property with SIPP?

The ability to invest in commercial property is a huge benefit of SIPP schemes and there are two main ways that you can do so:

1. Purchasing Commercial Property

  • If you have the SIPP funds readily available, you can purchase a commercial property outright.

  • If you do not, you can obtain a commercial mortgage from a bank/building society.

2. Transferring Commercial Property

  • In circumstances where you already own a commercial property, you can transfer ownership of it into your SIPP.

  • This means that you will not own the property personally anymore which has huge implications in relation to estate planning and tax-efficiency, though you may have to pay capital gains tax and stamp duty.

How Our Experienced Commercial Property Team at P.A. Duffy & Co. Can Help 

Our commercial property team pride themselves on providing invaluable advice in a professional and compassionate manner. Our team is dedicated to assisting you in securing your intentions and proficiently preparing for your future (and, in this case, retirement!) 

In relation to commercial properties and SIPPs, our expert team can provide advice and deal with your: 

  • Purchase of commercial property utilising a SIPP. 

  • Sale of your commercial property which was bought using a SIPP. 

  • Commercial mortgage offers. 

  • Commercial leases and sub-leases for the properties purchased, transferred, or sold.

  • Transferring commercial property from another pension fund into a SIPP. 

  • SIPP Trustee’s obligations (so you are aware of their powers and limitations). 

If you would like to transfer, sell, or purchase commercial property using a SIPP, get in touch with our commercial property team who will be on hand to take your instructions and answer any questions that you may have about the process.

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