Self-invested Personal Pensions

A self-invested personal pension, or SIPP, is a personal pension plan but with one very significant difference; the plan holder has freedom to choose and change from a wider range of options.

As well as the usual core investments: funds, equities, bonds and cash you can access a wide range of investments, including:

• Mutual funds
• Cash deposits
• Exchange traded funds
• Structured products
• Government bonds
• Corporate bonds
• Insurance company funds or policies

You can also invest directly in the shares of UK and overseas companies

Specialist investments - commercial property

Investing in commercial property with a SIPP gives you:

• Cash-flow enhancement - if you own the property you trade from why not sell it to your SIPP
• Tax-free growth in the property value - no Capital Gains Tax liability on the property sale
• Income Tax free rental income
• Protection against market volatility - the commercial property market is generally considered less volatile than investing in company shares, but remember investing in a single property could reduce liquidity as property can take longer to sell
• Tax relief for business users - if you use the premises for your own business, any rent paid is an allowable business expense
• Potentially, no Inheritance Tax liability - the property doesn't form part of your estate on death

One of the main attractions of a SIPP is that commercial property can be purchased by an individual or even by a group of people. SIPPs allow borrowing of up to 50% of the net value of the existing assets within your plan to assist with a purchase.