Buying a business premises in a pension

Buying a business premises in a pension

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Hi

I have a client who is thinking of buying their own building they are currently renting but also would like a pension so they thought they could buy the building as a pension scheme, is this correct? 

Can someone advise me where I can get more information on this?

Thanks

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By johngroganjga
27th Aug 2015 16:47

An IFA

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paddle steamer
By DJKL
27th Aug 2015 20:04

Google SIPP for info

If you google SIPP that will give you some background on one possible route, there are likely others but a SIPP is the one with which I am most familiar. You used to be able to do similar with Small Self Administered Schemes (SSAS) but no idea if still used and never my strong suit, I sort of understood how SIPPs worked  but not SSAS schemes.

Be aware that if client does not already have funds within a pension scheme then it may not be possible, there are both contribution limits to  schemes and very tight borrowing criteria within SIPPs (and even if scheme agrees to borrowings getting a bank interested may be difficult)

It is crucial to consider costs and benefits, charges can be a real drag on performance. From personal experience property has to be at a pretty significant value within a SIPP to make some of the fixed charges , as a percentage of fund value, reasonable. We had/have (we are selling) a parade of nine retail units in  the joint SIPPs I am involved with (by dint of my employment) and the annual fees/property fees/ vat return fees etc certainly eat into any income we receive. 

Get some background information and then steer client to an IFA. Be careful you do not stray into the sphere of giving investment advice.

If you use www.fool.co.uk (motley fool) they have a decent SIPP discussion board and a decent general pensions board, I would never take anything posted as gospel but an evening reading some threads would give you a fair bit of background info.

Once you get a rough idea a few conversations with a friendly IFA ought to help ( The one we use is pretty helpful but that may be because his firm gets our general insurance business, it is certainly not because we give him much business as an IFA)

Anyway none of the above is to be read as investment advice (paranoia setting in) and good luck with your research.

 

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Replying to Scott Houston:
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By rdmaccounts
28th Aug 2015 00:38

Thanks this is the advise I needed. I will steer them to an IFA but just needed to know more for my own knowledge. I had heard SIPPs were the way forward but that's a far as I knew. An IFA will now help my client. Thanks again

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