What is a Self-Invested Personal Pension (SIPP)?

A SIPP is a type of personal pension scheme that gives individuals greater control over their pension investments. It allows you to choose and manage a wide range of investments, including commercial properties and buy-to-let properties.

Property Purchase

With a SIPP, you can use your pension funds to purchase commercial properties or buy-to-let properties. The property will be owned by your SIPP, rather than you personally.

Tax Advantages

By using a SIPP to invest in property, you can benefit from various tax advantages, including:

• Tax Relief – Contributions made to a SIPP are usually eligible for tax relief, meaning you can receive tax relief on the amount you contribute.
• Rental Income – Any rental income generated from the property within the SIPP is generally tax-free, helping to boost your retirement savings.
• Capital Gains Tax (CGT) Exemption – If the property held within the SIPP is sold at a profit, any capital gains realised are typically exempt from CGT, allowing you to grow your pension fund without incurring additional tax liabilities.

Retirement Income

When you reach retirement age, you can draw an income from your SIPP through various methods, such as purchasing an annuity or using drawdown facilities. The rental income generated from the property within the SIPP can contribute to your retirement income.

Important Considerations

Investing in property through a SIPP involves specific rules and regulations set by the government and regulatory bodies. Consulting a financial advisor or pension specialist is advisable to ensure compliance and receive guidance tailored to your specific circumstances.

Finspire Finance Limited is not authorised and regulated to provide specific advice on tax planning although we can introduce you to suitably authorised entities should you so wish.