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Property into a Pension

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  • Property into a Pension

    I have heard that you can purchase a property and put it into a pension, what are the rules for this?

  • #2
    Hi Wizard1974UK,

    you can make an in specie contribution of a property to a suitable pension scheme. To avoid paying tax- it would be advisable to only use a commercial property.

    Typically, this can only be done by using either a SSAS (Small self Administered Scheme) or a SIPP. However, if you use a full SIPP-you need to check with the insurance company or your IFA on whether or not they will allow you to make this sort of transaction. Unfortunaltey, most insurance companies do not permit in specie contributions.

    There are many pros and some cons for doing an in-specie contribution.

    1. The taxman views this contribution as though its from your net pay. Therefore, your pension scheme will receive a grossed up payment from HMRC. This amounts to 22% of your taxable pay – for basic rate tax payers.

    2. The property is placed in a trust. Therefore, it cannot be seized by one's creditors. Ideal if you have a business.

    3. Capital Gains tax and stamp duty maybe due. However, there are ways to mitigate this.

    To go ahead and do this you would need either a SSAS or a SIPP. I work for a SSAS practitioner based in London -they might be able to help or at least point you in the right direction If you are interested in taking this further.

    I hope that this helps.




    • #3
      I've heard of SIPPs and REITs - how do they relate in terms of investment?

      Also, interesting point about commercial property investment vs domestic. Do you have any more details on that please?