Commercial Property Sipps Commercial - Sipps Pension Guide

Commercial Properties Sipp

Buying Commercial Property with a SIPP Pension is a good way of getting into Commercial Property Investment in a tax efficient way. There are huge benefits available to anyone wishing to invest in Commercial Property this way.

For example your SIPPS Pension Fund will permit you to borrow up to 75% of the properties value and any income that you receive from rents etc can be used to reduce the funds borrowing without incurring Taxation.

The other major tax advantage is that there is no Capital Gains Tax within a SIPP Pension nor is there likely to be any Inheritance tax issues. Of course there are pitfalls to look out for when investing your SIPP into a Personal Pension but if you carry out thorough due diligence you should be left with a valuable and sizable SIPP Pension Fund.

There are numerous ways of making your SIPP Commercial property work better for you. For example if you purchase a commercial property under the umbrella of your SIPP Pension and then your business becomes the tenant of that building you can receive the rent in a tax free form whilst your business pays you the rent as a tax deductible expense.

A lot of people also use their SIPPs as protection against insolvency as it is the Pension fund that owns the property not the individual. You can transfer your existing personal pension fund to a suitable SIPP and from April 2006 you will be able to invest in both Residential and Commercial Property.

Unlike buying Residential Property with your SIPPs Pensions any Commercial Property that you purchase must be within the UK. You are not restricted to Freehold commercial properties but if it is Leasehold then the Banks or lending sources will have some guidelines as to what they are prepared to lend on.

One other quirk is that you cannot have owned any Commercial Property that your SIPP Pension wants to purchase or any "connected" person has owned during the previous 3 years.