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SIPP Property purchase sense check

benjaminfabibenjaminfabi Moderator
in Technical stuff

Hi,

Business owns property.
Business owner has SIPP with sufficient liquidity (£60k) to buy property from business.
Business doesn't need the capital, so makes company pension contribution of £60k into SIPP for business owner, using carry forward.

Am I missing something obvious that would stop this strategy?

Thanks

Benjamin Fabi 
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Comments

  • richallumrichallum Administrator

    Can't think of anything. Why does client want to do it?

    Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern. 

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  • benjaminfabibenjaminfabi Moderator

    I couldn't either, thanks.

    Maximise tax-efficient extraction of capital from business basically. Plus mopping up several old (pre '95) S226s and PPPs as he plans to retire in a few years and needs to get his ducks in order.

    IHT improvement as moving from BPR to pension, no more CGT on future increases in value, rent an allowable expense and a tax-free revenue source to the SIPP (ie not taxable in his hands), overall less than 40% of his pension funds, which themselves are only about 60% of his available capital for retirement.

    This is why I'm looking for the big downside!

    Benjamin Fabi 
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  • Yonkers420Yonkers420 Member

    Stating the obvious but Tapered AA for a large employer contribution?

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