Pensions  

Commercial property can save your pension

  • Describe how commercial property can be used in a pension
  • List when residential property can be used
  • Describe what happens with tangible moveable property
CPD
Approx.30min

Connected party transactions are not typically problematic at the point of purchase or sale because it is generally accepted that in order to avoid tax charges the transaction must take place at the exact price supported by a valuation by a qualified surveyor.

Rent from connected parties can be more problematic because individuals may, somewhat understandably, struggle with the idea that "paying rent to themselves (through their pension)" has to be prioritised in the same way it would with a third party landlord.

If rent is not paid in accordance with the lease and any outstanding rent chased in the same way it would be by a third party landlord – which potentially creates the novel concept of a trustee having to chase the business which they themselves control for outstanding rent – then significant tax charges can apply.

Gareth James is head of technical at AJ Bell

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. The author expects the DWP to bring in rules which will allow schemes to block transfers to occupational schemes where a genuine employment relationship can not be evidenced. True or false?

  2. Why should someone use a pension fund to buy their premises?

  3. Time shares are treated as commercial property by HMRC, true or false?

  4. Which of the following is NOT permitted as residential property?

  5. What impact does existing borrowing have on the value of a pension fund?

  6. What happens with 'tangible movable property' in a commercial property?

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You should now know…

  • Describe how commercial property can be used in a pension
  • List when residential property can be used
  • Describe what happens with tangible moveable property

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