Investments

Property

Your SIPP can be used to purchase freehold or leasehold commercial property and land. You can purchase the property on the open market or from a connected party such as you personally, your business or a person connected to you. If the property is purchased from a connected party then the purchase price must be the open market price supported by a professional valuation.

The property can be leased to a third party, or to your business. If the property is leased to your business, then:

  • The lease must be granted on commercial terms; and
  • The amount of rent payable must be at a commercial rate and again supported by a professional valuation.

Your SIPP cannot be used to purchase residential property including ground rents (even if it is to be converted to commercial use and planning permission for such a conversion has been obtained). Your SIPP can only purchase residential property in the specific situation where it forms a part of a commercial property, such as a caretaker’s flat occupied by a non-connected employee as condition of his or her employment.

Commercial properties with a residential aspect, such as hotels, guest houses and nursing homes, are permitted as long as you (or any other connected parties) do not use the facilities other than at a commercial rate.

Your SIPP can purchase commercial property jointly with other SIPPs (or SSASs) as well as with you personally, your business or other parties. In this case, the participants will each own a percentage of the property which is determined by how much they contribute towards the purchase price.

If the property is subject to VAT then we will register your SIPP for VAT, which will enable us to reclaim the VAT paid on the purchase price. All rent charged on the property will also be subject to VAT.

Your SIPP can develop any land or property that it holds but the cost of the development must be met by your Plan. If you opt to tax the property for VAT purposes then we can reclaim the VAT paid on contractor’s invoices.