Should my Pension buy my Office?

Not a lot of people know that you can actually use your Pension to purchase direct holdings of Commercial Property. i.e. Your office, or Warehouse.

So, if you are self-employed, or a business owner, you'll likely be in one of the following positions.

Currently Renting

If you are currently renting a property then all of that rent money is going out of the company, straight into someone else's pocket. They are also benefiting from any property price increases.

If you own the property via your pension, you still need to pay rent, but instead you are paying the rent to your own pension and furthermore, the contributions are still an allowable business expense saving you Corporation Tax (Currently 20%).

A quick example, you are currently paying rent of £1,000 per month over a 20-year period. The potential advantages are;

  • an extra £400,000 in your Pension, and

  • a Property that has potentially doubled in value

Your business already owns your office/warehouse?

Another interesting one and a fantastic way for the business to free up some money, either to draw as earnings, or help the business grow.

The Pension can buy the property from the business at market value, leaving the business with the money as either income, or to be used for expansion.

What do you need?

  • Some Pension savings would be useful, although with strategic pension payments and borrowing, this isn't essential. You can also join together with your spouse and/or business partner to achieve this.

  • The right property!

  • A meeting with a financial adviser, why not book in for a meeting with me to explore your options.

Gary Lumb

Managing Director at Yorkshire Rose Financial Planning

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