SIPP - Investing in Student Accommodation

Elliot.Rigsby

Does anyone have any experience in investing in student accommodation?
It seems to be an allowable investment on the surface but when I have dug a little deeper there seem to be restrictions.
I would like to purchase a property for my son and friends to live in whilst at University, has any one managed to do this inside a SIPP?

Cautious_Investor_3

Hi

I'm afraid it is just not possible, you cannot hold residential property in a SIPP. No way round it I'm afraid.

The Cautious Investor

SippTechie

I've got very recent experience of dealing with this question.

Quick summary:

1. If you can afford it, you can buy an entire halls of residence, as this is one of the residential exceptions that HMRC allows. Not suitable in most cases unfortunately.
2. There are investments available that allow you to collectively take part in the purchase of a whole halls of residence with other investors. This is allowed by HMRC provided certain conditions are met. You'll also need to check with the SIPP provider that they are happy with the investment, as they may have other requirements. Not what you're looking for I'd guess.
3. There are investments available that allow you to purchase a single apartment in a halls of residence, with other investors then buying other single apartments in that halls of residence. This is not allowed by HMRC based on correspondence I've had with them in the last week.
4. As Cautious Investor states, the purchase of a single property for your son and friends is also not allowed by HMRC.

thenudeone

According to these links
http://www.curtisbanks.co.uk/assets/downloads/guides/guide-property.pdf
http://www.curtisbanks.co.uk/assets/downloads/guides/guide-investments.pdf
.. Residential Property would appear to be a no-no unless it was part of a genuine pooled investment scheme, which you may have to convince the HMRC of.

A single SIPP investing in a single property would not be acceptable, even before taking into account that the property was to be used by a "connected party" i.e. your son.