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Buying Retail Space through SIPP

Covering Market, Trends, and Practical (but see LEMON-AID for Building & DIY)
moneybagz
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Buying Retail Space through SIPP

#342602

Postby moneybagz » September 24th, 2020, 7:32 pm

I'm considering buying an empty shop, with office space (freehold) £110/sq. ft which is in a prime spot in my local village. As returns from equities/bonds are likely to be low for the foreseeable, I'm looking at alternative investments. Can anyone offer any advice on using my SIPP to purchase commercial property? I have no experience in this sector so any guidance would be beneficial. Ideally I'd like to rent the space out, but failing this I'd operate my own business.

Thanks

johnhemming
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Re: Buying Retail Space through SIPP

#342624

Postby johnhemming » September 24th, 2020, 9:16 pm

I did own a farm through a sipp once. I would talk to the trustees. There are costly hoops to jump through and not all trustees will do this.

Charlottesquare
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Re: Buying Retail Space through SIPP

#343761

Postby Charlottesquare » September 29th, 2020, 5:57 pm

The fixed SIPP fees may be disproportionate to the property value, check these, there will be general SIPP fees each year, likely a purchase fee, eventually a sale fee, possibly reviewing each lease fee, they may insist there is a managing agent you require to pay to collect the rent, they may insist on reports upon purchase that you might not have bothered with if buying yourself.

The key is research all the costs first, the tax advantage may evaporate within extra costs that otherwise would not be needed.
(We stuck a parade of mainly shell retail units into 4 SIPPS, whilst it was the correct decision as it was post the 2008 downturn and our bank was being a pain and the pension schemes were the only place we had ready cash, it was not cheap.

Also, expect the SIPPs to be poor at communication, none I have had dealings with have ben efficient, and they certainly do not really understand property (One I offered to write them a how to checklist re purchases in Scotland they were that poor)


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