Purchase your Premises

Buy your premises, boost your pension

Many business owners want to buy their premises but think they can’t afford the time or the money to make it happen. The solution often lies in pensions – since ‘A’-day, you can use a Self Invested Pension Plan (SIPP) or a Small Self Administered Scheme (SSAS) to buy your commercial property and save huge amounts of tax. To discuss this with an expert please request a call or email an advisor.

How does it work?
Imagine that two business directors rent premises with a market value of £1 million, paying around £80,000 annual rent. Renting is wasteful but owning the building using a mortgage is difficult, probably costing around £75,000 per year in loan payments plus a £300,000 deposit.

The obvious answer – buying the whole property using their pension – is ruled out by new regulations on borrowing. However, the directors CAN co-own the building with their pension funds. Each could transfer £100,000 of existing pension funds into a SSAS, which then borrows another £100,000 yielding a £300,000 deposit.  The directors then borrow the remaining £700,000 of the purchase price.

It gets even better. Each director can now transfer a proportion of their part of the property into their pension fund every year (currently £225k each year) – and claim full tax relief. Email an advisor for more information or request a call.

Or their company, as the tenant, makes a ‘profit dump’ into the SSAS. This lowers its trading profit and its tax bill!  The cash in the SSAS is now used to purchase a further share of the property from the directors. The director’s commercial property share may also qualify for business asset taper relief.

An end to rent
The result is a large potential saving on rental payments without your company having to find the funds for a deposit. Your pension fund(s) now own your UK commercial property and also controls the rent – and you gain a useful property element in your overall pension portfolio. By acting as Landlord and Tenant, you also remove one of the risks associated with property investment. To find out more, please email an adviser or request a call.
A complete service
You have enough to do running a business which is why Target project manages this entire transaction on your behalf. We’ll explain and manage each step, even helping to find the finance needed if you wish. All you have to do is find the premises you want to buy (which may even be the premises you’re currently occupying). We charge fees, not commission, and we’ll negotiate directly with your bank so that a ‘yes’ is far more likely to happen.
We’re happy to talk to you without obligation, click here to request a call.
For an initial talk, call us on 0845 241 3387 or alternatively, email an expert.