SIPPSep 2 2021

Sipp commercial property queries jump 56%

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Sipp commercial property queries jump 56%

The Covid pandemic has stimulated interest in commercial property among advisers and their self-invested personal pension clients, according to Curtis Banks.

The provider has seen commercial property queries jump by 56 per cent in the first half of 2021 compared with the same period last year.

Curtis Banks said it had noticed an increase in queries regarding connected party purchases – where a person uses a pension to purchase a property they already own, such as business premises.

It said this was being driven by business owners looking to release cash back into their business.

There have also been more queries about purchasing land and woodland, it said. 

This was from individuals who have been able to accrue additional savings during the pandemic due to lower outgoings, who are now looking to invest their cash.

In response Curtis Banks updated its property guide for advisers.

Jessica List, pension technical manager at Curtis Banks, said: “This is a very complex and technical area for advisers to navigate and Curtis Banks aims to provide advisers with the best possible assistance to navigate the complexity.”

According to the firm, commercial property remains a popular investment for Sipps due to the tax efficiency of the investment, including rent being paid tax free directly to a Sipp, and no capital gains tax on disposal.

Commercial properties can be purchased in different ways including by individual Sipps or groups of Sipps, as well as groups that include both Sipp and non-Sipp parties. 

In addition, the flexibility of the investment can be highlighted by the number of ways the purchase can be funded, through transfers, contributions or borrowing.

Kristen Cunliffe, managing director at Red Star Wealth, said: “Similarly to Curtis Banks, we are also seeing sustained interest from clients who would like to include a commercial property investment in their Sipp.”

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