Buying a Commercial Property With Your SSAS
The advantages of purchasing a property through your pension are as follows:
- no tax on rental income
- no capital gains tax on any increase in the market value of the property
- if you (or your business) are the vendor and financially healthy at the time of the transaction (i.e. it is not done to deliberately defraud), should you subsequently run in to financial trouble, the property is out of creditors’ reach
If your pension buys a property already owned by your business and then leases it back, there are further advantages, as follows:
- the business tax liability will be reduced as rent (which is not taxable as income to your pension) will be an allowable expense
- the business will have a cash injection that it could use either to repay any outstanding loans (including those to directors), as a source of working capital or to expand its activities
- there will be protection from creditors, as above
