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Property Self Invested Personal Pension (SIPP)

A Self Invested Personal Pension or “SIPP” is a tax efficient investment vehicle for retirement provision. Technically a SIPP is a Personal Pension, but whereas a traditional Personal Pension is tied to an insurance company who dictate where you can invest and on your retirement steer you towards an increasingly expensive annuity, a SIPP allows you a greater degree of flexibility over your pension funds.

Cash within your pension fund can be used to purchase SIPP-qualifying property with all the rental income and capital growth going into your pension fund. Some investors use their SIPP to purchase commercial property that they run their business from, enabling their business pay rent to their pension fund.

SIPP Finance

If there is insufficient cash in your fund to purchase a particular property, the SIPP can take a mortgage which may enable any shortfall to be addressed. However, the amount that can be borrowed is a maximum of 50% of the net asset value of the SIPP immediately prior to the borrowing and will take into account any existing borrowing. It is possible to purchase a property jointly between a number of individuals provided they all have SIPPs with the same provider. However, monies cannot be borrowed to lend to a connected Company.

A popular option is to use a SIPP to invest in a property fund as this offers a greater degree of flexibility and diversity than SIPP investment in a single qualifying property.

SIPP Investment in UK Residential and Commercial Property Funds

UK commercial property is SIPP qualifying, however direct investment in residential property is not. Fortunately, some property funds allow access to both UK commercial and residential property investment.

Using your SIPP to invest in a property fund enables you to pool your risk by spreading your investment over a variety of properties. Additionally, funds normally provide a lower investment threshold which might otherwise bar SIPP property investment. is a property adviser to – the specialist UK residential and commercial property fund managers – Cogent Capital ( Our property fund page provides further information on this type of investment.

A SIPP provides:

  • An alternative to a conventional Personal Pension by offering investors greater control over their pension arrangements
  • Freedom to choose where funds are invested, subject to certain Inland Revenue restrictions
  • The opportunity to buy commercial property or land in UK
  • Investment in UK residential property via a Property Fund
  • Ability to accept transfers from other UK tax approved pension arrangements
  • Significant tax advantages with full tax relief on contributions and largely tax free growth
  • Benefits can be taken at any time from age 55 years old
  • Tax free cash of up to 25% of the fund when benefits are taken
  • Freedom from the constraints of annuity purchase, allowing the investor to choose how and when to take benefits without having to sign away the funds to an insurance company
  • Death benefits payable to nominated beneficiaries in an Inheritance Tax efficient manner

Please note that does not provide advice on direct SIPP investment. Although we can advise you on the detail and types of SIPP qualifying property, you should seek specialist advice from an authorised SIPP provider. We introduce all interested clients to an authorised Financial Services Authority firm for this purpose. You should always seek advice from a qualified tax professional.


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