SIPPs and Commercial Properties (Self Invested Personal Pensions (SIPPS))

Member Name: Andy M

Product:	Self Invested Personal Pensions (SIPPS)
Date:	17/11/07 (183 review reads)
Rating:

Advantages: Reduces cost of property purchase. Very flexible

Disadvantages: Large outlay of cash to set up SIPP. May need 2+ tax years to have enough money within the SIPP

In addition you can invest in commercial properties. This reduces the cost of buying a property for a business substantially due to the tax benefits. You do have to pay rent to the SIPP however. Essentially you are a tenant renting the property from the SIPP and you must pay a fair market rent to the SIPP ( 4 - 8 % of the property value, though this value is accepted pracitice and not set by the revenue ). The rent itself is tax deductable and the rent going to the SIPP goes into your pension fund. In many ways a very attractive option if you're looking to buy commercial premises for your business

Summary: Very advantageous to buy a commercial property via a SIPP