SIPPs, SSAS and Commercial Property – why you need Valuations to avoid hefty fines

January 2024

If you are evaluating how to maximise the tax-efficiency of your pension, you may be considering a Self-Invested Personal Pension Scheme (SIPP) or a Small Self-Administered Scheme (SSAS). It is now commonplace to buy commercial properties and then put the property into one of these schemes. A SIPP or SSAS allows you to either buy the property outright or take out a mortgage to purchase the property. Any rental payments are tax-free, and this makes the purchase of a commercial property an extremely efficient tax vehicle.

Jonathan Mountford, GJS Dillon’s Director of Professional Services and Valuations and RICS Registered Valuer says ‘As the property is owned by the individual, and either let to their trading business or to a third party, the Pension Provider will require regular rental and market valuations. However, it’s worth noting that due to changes in market values, reinstatement cost assessments will need to be made every 3-5 years. ‘

‘This Valuations process helps to ensure that the correct rental payments are being paid by the tenant to the Landlord ‘ continues Jonathan ‘It is not simply a case of putting up rents to increase your tax-free pension contributions as there are extremely high penalties and fines for this.’

Therefore, it is essential that the Providers have regular RICS Redbook Valuations to avoid these penalties.

Valuer Registration is a risk monitoring and quality assurance programme which checks compliance with the RICS Red Book.  It ensures the highest valuation standards are met which offers protection and confidence to both valuers and clients.

Further information is available from Jonathan Mountford at GJS Dillon on 01905 676169  or

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