Individuals and syndicates are currently able to purchase
commercial property through a SIPP pension.
Since April 2006 a SIPP
holder can borrow up to 50 per cent of the value of
the commercial property for the acquisition of the property into
the SIPP pension
For example, if a suitable commercial property was valued at
£300,000, there would have to be at least £200,000 in the
pension fund to make the SIPP Property purchase possible.
Many types of commercial property are suitable for SIPP investment.
Suitable commercial property types include shops, industrial units,
warehouses, offices and even car parking spaces.
A Syndicated SIPP can be a attractive solution where SIPP
holders wish to club together to buy commercial property which
would normally be outside their individual purchasing power.
Downsides of a SIPP and Important
SIPPS are very high risk investments and are suitable for only a few investors.
Investors should be willing to risk potentially losing their retirement fund
aswell as their business should the business fail. It is vitally important to
always seek advice before investing in a SIPP. Investors usually pay higher
charges for the benefits of utilising a SIPP
SIPPS are aimed at people who want to manage their own fund by dealing with and
switching their investments when they choose. These schemes are suitable for
people who are happy to pay higher charges than most personal pension plans.
SIPPS are geared towards experienced investors with large funds. Investors need
to have strong credible business plans and should be happy to tie their
retirement plan to their business. SIPPS investors should accept a much higher
risk investment strategy knowing that they could lose their retirement fund as
well as their business should their business fail. SIPP investors should be
happy to pay higher charges compared to most personal pension plans.