SIPP vs SASS

pabloesc

hi there,

I'm doing some initial research and looking for ideas relating to SIPP vs SASS, or something else....

I've acquired a small piece of land that may work for a small commerical idea. I'm thinking of using a Pension wrapper to buy the land from me, then transfer my pensions into the the Pension wrapper for the development, so that the potential income is free of income tax and hopefully, will provide a better return. 

A SIPP makes sense, yet if I want to pass the development/land to my kids (in good time!) would a SASS be more practical, or, a wealth trust?

Pablo.

zagfles

How do you mean the "potential income is free of income tax"? It is when paid into the SIPP/SSAS, but when you (eventually) withdraw it from the SIPP/SSAS it will be taxable as pension income (subject to the usual pension rules, eg tax free 25%)

You also need to be aware of the rules such as if you or your business uses the land you'll need to pay the SIPP/SSAS a market rent, also that residential land can't be in a SIPP/SSAS (as there's too much scope for tax abuse - eg making personal use of it without paying rent).

Marcon

pabloesc said:

hi there,

I'm doing some initial research and looking for ideas relating to SIPP vs SASS, or something else....

I've acquired a small piece of land that may work for a small commerical idea. I'm thinking of using a Pension wrapper to buy the land from me, then transfer my pensions into the the Pension wrapper for the development, so that the potential income is free of income tax and hopefully, will provide a better return. 

A SIPP makes sense, yet if I want to pass the development/land to my kids (in good time!) would a SASS be more practical, or, a wealth trust?

Pablo.

You need some specialist advice if you're serious about pursuing this. An IFA/full fact find is likely to be your best starting point, given that you clearly plan to take a holistic view of your finances (very wise).

xylophone

 By way of example, I see that a property SSAS is  offered here - the Guide might be worth a read before you approach a specialist adviser?

https://thelandlordspension.co.uk/ssas-pension/

pabloesc

zagfles said:

How do you mean the "potential income is free of income tax"? It is when paid into the SIPP/SSAS, but when you (eventually) withdraw it from the SIPP/SSAS it will be taxable as pension income (subject to the usual pension rules, eg tax free 25%)

You also need to be aware of the rules such as if you or your business uses the land you'll need to pay the SIPP/SSAS a market rent, also that residential land can't be in a SIPP/SSAS (as there's too much scope for tax abuse - eg making personal use of it without paying rent).

in the short-term, the rental income will be paid to the SIPP/SSAS, then when I retire would look to draw down. If I use a company/personal option, I'm paying tax in the short-term.