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SIPP / SSAS: COMMERCIAL PROPERTY MATTERS

Contributed by MW Pensions
06 September, 2012


Contributed by MW Pensions. [www.mwpensions.co.uk]

This newsletter is for professional advisers. Members of the public should not rely upon it

We would like to announce the formation of a like minded group of professionals, with years of experience and expertise in the various transactions involved in using pension schemes to buy commercial property.

Collectively we can offer a comprehensive service covering all aspects of the property purchase using pension structures.

  • SIPP/SSAS Provider well versed in property purchase and client support
  • Legal advisers with years of experience in the purchase of property using SIPP/SSAS
  • Banking and mortgage services: Bank deposit rates
  • Comprehensive and competitive insurance service

A SIPP or SSAS can be a useful vehicle for owning a commercial property, especially if you are both investor and tenant, in your own company premises.

Sadly the experience of buying a property using a pension scheme can be extremely problematic in practice, for a variety of reasons, including lack of clarity about the costs, fees and timescales. There may also be issues about expertise, service and support.

To see the estimated costs and timescales, please see the following pages

Commercial Property Matters is designed to provide intelligent solutions to the above problems and will provide:

  • Transparent, competitive and simple cost and service proposition
  • Clear overview from the outset of the duration of the whole process
  • Communication and updates at key stages of the transaction
  • Dealing with the same group of people throughout – no call centres
  • An emphasis on high quality service, support and communication
  • Years of experience, expertise and knowledge
  • Specialist solutions such as Syndicate Agreements

If you would like to know more about this proposition, the services provided and the costs involved, or would just like to discuss your situation, please don’t hesitate to contact us.

Specimen Fees

EXAMPLE 1 – GETTING STARTED

An adviser recommends a SIPP for his client. The client has three pension funds with other providers which will all be transferred as cash.  It has been decided that the fund will be used to purchase the property that the client’s company trades out of.  The adviser is happy to facilitate the transfer which means that he has requested pension discharge forms from the current providers and, once received, sends them off to MW Pensions as the administrator.

MW Pensions then establishes the SIPP and sets up a bank account. Within a short period of time the other providers transfer their funds to the SIPP, and they are deposited in the SIPP bank account. MW Pensions keeps the adviser informed as to the receipt of the transfers.

Whilst waiting for the funds to be transferred in we will have arranged for the property to be independently valued and contacted the client’s preferred solicitor and instructed them to manage the purchase of the property and set up of the lease back to the company.

What are costs for this?

Getting started

  • SIPP establishment and property purchase £950
  • Transfer in charges (with the adviser handling the paperwork) Nil
  • SIPP and property annual administration fee (taken in advance) £1150

            TOTAL £2100 plus VAT

There will also be the cost of the valuation fee and the solicitor’s fees

Ongoing charges

  • SIPP and property annual administration fee £1150

TOTAL per annum £1150 plus VAT

EXAMPLE 2 – SYNDICATE OF 2 CONNECTED MEMBERS

The client and their spouse have been given the option to purchase the trading premises. The IFA advises that the previous pension funds can be transferred but are insufficient to cover the costs of the property. The client’s accountant however advises that the company can and should make contributions to both pension funds.  Together the transfers and the contributions will cover the purchase of the property and costs

What are costs for this?

Getting started

  • Establishment of 2 SIPPs and property purchase £1300
  • Transfer in charges (with the adviser handling the paperwork) Nil
  • Contribution charges Nil
  • Annual administration fee for 2 SIPPs and property (taken in advance) £1700

            TOTAL £3000 plus VAT

There will also be the cost of the valuation fee and the solicitor’s fees

Ongoing charges

  • Annual administration fee for 2 SIPPs and property £1700

TOTAL per annum £1700 plus VAT


EXAMPLE 3 – SYNDICATE OF 3 PLUS MORTGAGE

The client and 2 business partners wish to move the company to new premises.  Each has existing pension funds but they are insufficient to make the purchase of the property outright.  The accountant considers that whilst contributions could potentially be made there is insufficient free cash to do so.  However put together the transfers would amount to three quarters of what is needed for the property purchase and the bank consider that as the company has a good credit rating it is prepared to lend to aid the purchase.  The IFA advises that it would be better to buy via 3 SIPPs and as the SIPPs can borrow up to 50% of their funds there will then be sufficient to complete on the purchase

What are costs for this?

Getting started

  • Establishment of 3 SIPPs and property purchase £1575
  • Transfer in charges (with the adviser handling the paperwork) Nil
  • Set up of mortgage £500
  • Annual administration fee for 3 SIPPs and property (taken in advance) £2175

            TOTAL £4250 plus VAT

There will also be the cost of the valuation fee, bank charges to set up the mortgage and the solicitor’s fees

Ongoing charges

  • Annual administration fee for 3 SIPPs and property £2175

TOTAL per annum £2175 plus VAT

Also note that property purchase may attract VAT and Stamp Duty Land Tax (SDLT) on the purchase price so needs to be considered when costing out a purchase.



MW Pensions Limited, Oaklands Business Park,

Hooton Road, Hooton, Cheshire, CH64 4AF

Tel: 051 328 1777   Fax: 0151 218 0707

e.mail: admin@mwpensions.co.uk           www.mwpensions.co.uk





 


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