Case Study - Financial Planning

We were introduced to a director of a successful, expanding business, which required new larger commercial premises from which to operate.

The director each had Defined Contribution Money Purchase Pensions which collectively had a value that was more than sufficient to buy the new premises.

The director therefore decided to transfer and consolidate his pension fund within a Group SIPP to acquire the new property.

By making use of this pension scheme in this way, he saved money, having negated the need to go to his bank to borrow funds.

Holding the commercial property within his pension scheme allowed him to benefit from future tax-free rental payments to the scheme, paid by the business (also treated as a trading expense).

The property is now retained within the protected environment of his new pensions scheme. The property will not be subject to capital gains tax at the point of disposal and, furthermore, under normal circumstance, the pension’s property asset would also be exempt for Inheritance Tax purposes.

The pension member also secured a tangible pension asset with the ability to generate a known future income stream, to help with his long- term retirement plans.

This was received well by the company director. The client appreciated the firm’s proactive team approach supporting him through the relevant service lines, delivering a positive, tax efficient solution.

Please note that this option doesn’t work for everyone and that appropriate professional, financial advice should be taken at all times.