transfer commercial property into SIPP

AKW

Many thanks for the advise. Our accountant told us that there would be tax benefits to invest the commercial properties that we already own without any mortgages into a SIPP. Whilst we are paying IT on the rent revenue and also there will be IHT liability when these properties are passed to our children, none of this would be the case if the properties are invested into a SIPP. So the investment into some doubious project is not applicable. I would like to know if a pension provider would be interested in our properties. From what I read before, once the properties are invested, we would not own them any longer. I struggle to understand why there would be a preferencial tax treatment if a pension provider owns our properties rather than us owning the properties and using the rent for exactly that, namely an income during retirement.

midlandsimon

AKW when in the pension wrapper there is no tax on the income. Only on the way out subject to usual PAYE after your 25% tax free. Your SIPP is outside of your legal estate so not subject to inheritance tax. In fact, if you die before the age of 75 then it passes to your beneficiary all tax free!!! If post 75 then subject to beneficiary marginal tax rate.  

The benefits of putting a property into the SIPP are huge. Company pays rent to SIPP so can offset the payment off the company books to reduce corporation tax. Income is received into the SIPP tax free and no capital gains on property value increases.  Can develop property using SIPP funds/ rent can be placed into traditional stocks/funds etc to diversify. Property can be bought using tax relived money which can be then released to the vendor of the commercial property. That's just to name a few!

AKW

thanks for that advise. What are the disadvantages, please?