INVESTMENTS

& SAVINGS

PENSION

ADVICE

BUSINESS

RELATED

PERSONAL

INSURANCE

TRUST

ADVICE

ANNUITY OR

DRAWNDOWN

INHERITANCE

TAX

MORTGAGES

Buy a commercial Property

We've advised and supported Gerald for over 15 years and he had an opportunity to the commercial property that his business traded from, so we made it happen.

Gerald had already accumulated around £334,000 in his pension fund and the property had been offered to have at £450,000 including the taxes so we converted his fund into a SSAS (Small Self Administered Scheme). This allows the pension fund to borrow 50% of its value, in this case, £167,000 and this allowed a total of £501,000 being made available to purchase the property. This allows for a surplus of funds to cover fees and stanp duty.

The rental income, charged to Gerald's business, would initially be used to pay off the £167,000 loan, along with any contributions made into the scheme and the income was set in line with market rates at £50,000 per annum.

 The main benefits of this over a 4 year period are:

  1. The loan will be paid off.  
  2. The £50,000 per annum rent could buy additional investments such as Unit Trusts.  
  3. Once Fred reaches retirement age, the rent could be paid into a bank account and taken as a pension.  
  4. There’s no inheritance tax on an investment held in a pension so the property could pass down to the next generation and so on, almost creating a ‘family income generating legacy’.  
  5. Instead of paying rent to the owner of the property he is now paying into his own pension fund.
  6. There was no VAT on this property becuase his business was already a tenant

 Dont take our word for it here's what Gerald said ‘John and his team made it all happen. I knew it could be done but John showed me how the financials would work and quickly made the funds available to complete the purchase. It’s great to know that even when I retire I’ll have an income as well as the building! Thanks for all your help.

Purchasing property this way is only possible for certain individuals. It can involve high risks. For example, the property might not be easy to sell when you want to retire. The property market may fall, and your pension fund could lose value as a result. The company is a separate legal entity to the SSAS. If the company went into receivership the SSAS might not receive the due rent. 

 

 

Give John or Adam a call on 01752896943 - they're here to help you.