Pension schemes can often be used to purchase commercial properties as an investment

The most common types of schemes are self-invested personal pensions (SIPP) and small self-administered schemes (SSAS).  You can set up a SIPP or SSAS through a professional provider or an authorised Independent Financial Advisor.

If the SIPP/ SSAS does not have sufficient funds for the purchase, it is possible to borrow up to 50% of the scheme’s value, subject to complying with a number of conditions.  The property is then leased, and the rents paid are used to pay back the loan.

Many mainstream lenders now offer finance to pension schemes, however it is common for individuals or companies to lend money to their scheme to assist with a purchase.  This would be documented by a Loan Agreement which would set out the terms of the loan, i.e. amount owed, repayment dates and interest due.  We would also recommend that the loan is secured by a First Legal Charge against the property which provides security for repayment.

If you need any assistance with the purchase of a property into a pension scheme, are considering lending to your scheme, or are disposing of a property owned through a pension scheme, BHW can advise on and deal with all legalities.

We regularly handle commercial property transactions on behalf of pension trustees and work with pension advisors and accountants, providing a timely service to secure commercial property investments.

Get in touch

This field is for validation purposes and should be left unchanged.

News & Insights

The latest from our legal experts