April 10, 2024


Are you a business owner considering investing in trading premises? If so, have you explored the potential tax advantages of using a Self-Invested Personal Pension (SIPP) or Small Self-Administered Scheme (SSAS) arrangement? In today’s article, we’ll delve into the benefits of utilising these arrangements for acquiring your business premises.

What are SIPP and SSAS?

Before diving into the advantages, let’s briefly define what SIPP and SSAS entail. Both are pension schemes that offer more flexibility and control over investment choices compared to traditional pension plans.

A Self-Invested Personal Pension (SIPP) is a personal pension plan that allows individuals to make their own investment decisions. On the other hand, a Small Self-Administered Scheme (SSAS) is a pension trust set up by a company for its employees. Both schemes empower you to invest in a wide range of assets, including commercial property.

Tax benefits galore

One of the most compelling reasons to consider purchasing trading premises through a SIPP or SSAS arrangement lies in the array of tax advantages they offer:

  1. Tax Relief on Contributions: Contributions made to a SIPP or SSAS are eligible for tax relief, subject to certain limits. This means that investing in your business premises through these arrangements can provide immediate tax benefits by reducing your taxable income.
  2. Tax-Free Growth: Any rental income generated from the trading premises held within a SIPP or SSAS is sheltered from income tax. Moreover, any capital growth on the property is also free from capital gains tax, allowing your investment to grow more efficiently over time.
  3. Inheritance Tax Planning: Assets held within a SIPP or SSAS are typically outside of your estate for inheritance tax purposes. This means that upon your passing, the value of your trading premises held within these arrangements may not be subject to inheritance tax, providing a valuable planning opportunity for passing on wealth to your beneficiaries.
  4. Pension Contributions and Corporation Tax: For businesses making contributions into an SSAS or SIPP arrangement, these are generally considered an allowable business expense, reducing the company’s taxable profits and potentially lowering its corporation tax liability. Buying a property through your pension scheme can have lots of long-term benefits, however, it should be noted that there are additional costs and mechanisms to be aware of, these include:
  • Lease and rent reviews - This will be required periodically and involve professionals such as surveyors and solicitors.
  • Fees – SIPPs and SSASs that allow for property purchases typically charge higher fees than standard arrangements to take into account the work involved with the property.
  • Illiquidity – If all your pension fund is tied up in a commercial property it will make it difficult for your scheme to make lump sum payments. You may have to mortgage the property or wait for cash from rental income to build up.
  • Diversification – Putting all of your eggs in the one property basket.


In conclusion, purchasing trading premises through a SIPP or SSAS arrangement can offer significant tax benefits for business owners. From tax relief on contributions to tax-free growth and income in retirement, these arrangements provide a tax-efficient way to invest in property while planning for your future financial security.

However, it’s crucial to seek professional advice from a qualified financial advisor or tax specialist before making any decisions. They can help you navigate the complexities of pension schemes and ensure that your investment aligns with your long-term financial goals.

By leveraging the tax advantages of SIPP or SSAS arrangements, you can not only secure your business premises but also enhance your overall financial well-being in the process.


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