There are two types of pension scheme that are able to invest in property. Self Invested Personal Pension schemes (SIPPs) and Small Self-Administered Schemes (SSASs) can both purchase commercial property, as well as commercial and agricultural land. There is significant complexity in this area and it’s important to work with a property team with a deep understanding of the complex products and the legal and regulatory framework in which they operate.
We provide specialist advice in dealing with the property elements of such schemes, on a range of issues, including property purchases, leasebacks and loans (which may be secured against all types of assets ranging from residential premises to agricultural machinery). We work closely with pension trustees and their advisers, ensuring that transactions complete quickly and smoothly and in full compliance with HMRC requirements (avoiding potentially substantial penalties).
Our lawyers advise on all types of pension scheme property transactions, including:
The purchase and mortgage of commercial property through SIPPs and SSASs
The sale of commercial property through SIPPs and SSASs
The grant and renewal of leases of pension property investments to member tenants or to third party tenants
Leasehold management of pension property investments
Loan and leaseback agreements
Who we help
We work with the trustees of pension schemes of all sizes, helping them and their beneficiaries with all aspects of pension property investment.
Relevant recent cases and transactions include:
Acting for a SSAS lending capital to its sponsoring employer (a chain of boutique hotels). The security was to be charged on a residential property (considered higher risk of triggering a penalty for unauthorised payment). The property belonged personally to one of the sponsoring employer directors rather than being a company asset.
A complication arose when it was discovered that the property being used to secure the assets was unregistered and that the deeds could not be located. Following a series of enquiries and investigations the deeds were tracked down, enabling a first registration. During this process, searches revealed that the property was subject to at least one legal charge. This had the potential to result in substantial penalties on the fund if the new charge was not able to be registered as a first charge but we successfully resolved the issue.
The new legal charge was drawn up specifically tailored to the situation (a third party securing loan), which ensured that in the event of default of the loan the pension fund would not become mortgagees in possession – which again would have serious tax implications.