With the Harsant SIPP and SSAS you can use funds in your pension to invest in freehold or leasehold commercial property or land. You can then either rent the property to a third party, or it can be leased to your own business. The rental income from the property is then reinvested into your pension.

You can either buy a property by yourself or if it is too expensive to buy yourself, we have considerable experience in property syndicates between known parties who each have a Harsant SIPP.

When it comes to retirement, any property owned within the pension will be included in the total fund value. 25 per cent of the fund may be taken as a tax free lump sum and the balance of the fund may be used to purchase an annuity, or taken directly from your SIPP or SSAS as an unsecured pension and alternatively secured pension if you are aged over 75.

How It Works

To understand the process of purchasing property in a pension scheme, obligations of the member trustee and risks involved in investing in commercial property it is important to also read the Harsant Pensions Property Purchase Guidance (available on request) in conjunction with the following.

To start investing in commercial property with your Harsant SIPP or SSAS you first need to fill in the Property Questionnaire. This enables Harsant Pensions to assess the investment proposal and decide whether it can be included in your pension portfolio. All property investments must satisfy HM Revenue and Customs regulations, as well as the Harsant SIPP Trustees.

You may purchase a property from an independent third party or from a connected person - that is, a relative or friend or associated company. When purchasing from a connected person you must ensure the property purchase price is at open market value as confirmed by a qualified member of the Royal Institute of Chartered Surveyor (RIC).

You may borrow up to 50 per cent of the value of your SIPP or SSAS fund to purchase commercial property but the rental income must cover the repayments. All fees, from purchasing the property to selling the property must be paid for by the pension fund.

When owning property in your pension fund it is important to remember they are not easily convertible to cash and funds cannot be partly withdrawn. If your entire fund was made up of property investments then its sale would be the only option to take 25 per cent of your fund as a lump sum at retirement. By mixing property investment with other asset classes, selling the property becomes an option rather than a necessity.

Interested? Want to find out more?

Give us a call at (0151) 648 7615 or drop us an email info@harsantpensions.co.uk.