SIPP owners take notice!! (Copy)

Owning a commercial property through a SIPP, a self invested personal pension, is an excellent, tax efficient way for a business owner to purchase their own commercial property.

The SIPP becomes the legal owner and the investor becomes a beneficiary of the SIPP.

The business owner then occupies the asset themselves and their SIPP charges their business a rent. All good so far – owner and occupier are fundamentally the same but for legal title!

Over time, as business owners change direction, they often rent out their SIPP held business properties to 3rd parties and this is where problems can arise if they are not actively managed.

Ashurst Real Estate recently took over the asset management of a SIPP held commercial property where the owner was based overseas and stopped having a hands on approach.

The property was managed at the most basic level by a large firm of managing agents who didn’t look beyond the most rudimentary tasks, allowing the property to fail in terms of desirability, marketability and a host of health and safety matters.

Following our involvement with some active hands on advice, the property was returned to its glory and was successfully disposed.

The moral of the story is that an off site SIPP beneficiary needs to keep a careful eye over its investment and not rely on the pension fund that owns the SIPP or the managing agent because it may be beyond their remit.

In the current, challenging commercial property market, active asset management needs to run alongside the more mundane property management in order to maintain validity in the market, desirability to existing and potential new tenants and of course, income production.