Using your SIPP to buy a commercial property is extremely popular with small business owners who can use their pension fund to buy premises for their company. Using a larger pension fund in this way allows for several tax benefits, these include:

• Claiming the expense of the property as a tax deduction and therefore the sipp would pay no tax on the rental income it receives.
• There is no capital gains tax.
• The rental income is paid directly into the sipp, allowing the fund to grow.
• There are no tax liabilities when the property is sold.
• A sipp is free of inheritance tax; therefore if a sipp was used to buy a commercial property then this may help to protect business assets.

New additions to the traditional commercial property investments include; hotel room investments and overseas commercial property investments.

However, it should be taken into consideration that if the business were to go under then the owner’s source of income and property would be lost. Due to the complexities in this sort of investment, investors should seek independent expert advice before proceeding