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investing in commercial property.

Buying commercial property via a pension scheme can be a tax-efficient way to inject cash into a business and provide regular income in the form of rent. Those planning to purchase property through their pension, should consider the following:

 

Independent valuation.

Prior to purchasing an acceptable property investment an independent valuation is required.

Borrowing.

It is possible to borrow up to 50% of the net value of the assets held within the pension scheme.

Insurance.

Adequate insurance cover is mandatory and held in the name Rowanmoor Trustees Ltd, including property owners liability insurance of at least £5m.

Rental payments.

Rent must be paid when it falls due and subject to regular rental reviews.

Approved lenders.

We do not stipulate or limit the lenders that can be used, although all borrowing documentation must be agreed by us prior to a loan being taken out.

Solicitors.

Member trustees must use our retained solicitors who have vast experience in this field.

Property management.

We do not provide property management services. However, it is the responsibility of the pension members to put appropriate property management arrangements in place.

Examples of properties we do not allow

  • Taxable property including residential (dwelling houses), holiday apartments, beach huts, and caravans.
  • Residential Institutions
  • Secure Residential Institutions
  • Property that benefits from an aggregated income such as hotel rooms and storage pods.
  • Types of property where we are advised that there is no re-sale market or we foresee real management difficulties.
  • Any property where insurance is unavailable or inadequate in the insurance market for any reason, e.g. combustible composite panels, waste transfer and recycling sites, historic flooding, subsidence.
  • Land purchased from a third party which adjoins a member’s personal residence where the member or connected party may gain a non-relevant benefit, e.g. being purchased to preserve a view from their house or to stop someone else building, or to increase the value of their personal residence.
  • Properties at auction.
  • Properties with known unremediated environmental issues.
  • Properties with existing tenants with known historic rent arrears or other material breaches.
  • Freehold properties where part of the building comprises long leasehold residential properties even if let to third parties with nominal ground rent.
  • Land for residential development, garden land, etc.
  • Certain other residential institutions, e.g. student accommodation, care homes, etc.

we know property.

Our dedicated property team are well versed in the intricacies of holding property within a scheme. They oversee a property portfolio of 5,000+ UK and overseas properties.

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