SIPP Commercial Property

[pek66]

Has anyone bought back their own commercial property from their SIPP? I think that I understand the general workings of this but I'd like to know if anyone has any experience please before I take the plunge?

[AndyC_123]

Yes, but in the form of land.

[pek66]

AndyC_123 said:

Yes, but in the form of land.

Thanks Andy, did you get hit with any unexpected fees? - the SIPP admins are not shy of charging !

[macron]

Which sipp providers are people using for this and do they offer leverage too, or do you go separately for that elsewhere?

[Jockman]

Not done it yet but I assume the workings are pretty straight forward. Stamp duty will be a sod obviously.

Congrats hopefully on the tax free capital gain.

[Rufus Stone]

The SIPP provider will likely insist on a 'red book' valuation to ascertain the sale price, and they aren't cheap. Other than that it's a standard sale for them and purchase for you.

Is the property subject to VAT?

[Jockman]

I’m in the process of buying another commercial property into 4 SIPPS. Valuation must be RICS as usual but is coming in at £2,300 for a £1.45m agreed price on a £1.8m asking price. Double what we paid for a valuation 11 years ago but that should give you a flavour of what to expect.

The property is elected to vat which is a pain but not insurmountable.

[macron]

Why 4 sipps? Why not one? What's the benefit there? Are we talking 4 directors who had better get on well with each other?!

[Jockman]

macron said:

Why 4 sipps? Why not one? What's the benefit there? Are we talking 4 directors who had better get on well with each other?!

The tenant will be a company owned by my brother and I so we always share the investment. As our SIPPs are already invested in 2 other commercial properties we need our wives SIPPs to help fund the deal. Hence 4.

[pek66]

Thanks Jockman, I own a 50% share and the SIPP owns the other 50%. I suppose that I'll have to work out if the stamp duty and other costs are worth it compared with the pretty high ongoing SIPP fees & compliance with the other rules in the SIPP.

It's a retail premises and there's been no increase in value in the 8 years I've owned it although the rent yeild is attractive. Our own business is the tenant but I think I need it outside of the SIPP ready for future plans.

I used the SIPP in order to keep our borowings down at the time of the original purchase. We've more options now.

Jockman said:

Not done it yet but I assume the workings are pretty straight forward. Stamp duty will be a sod obviously.

Congrats hopefully on the tax free capital gain.