Why Proposed IHT Changes Won't Stop This Commercial Property Strategy

Changes to pensions are fast approaching, but for business owners using their pension to hold commercial property, the reasons for doing so remain compelling.

From April 2027, most unused pension funds and pension death benefits will be brought into the scope of inheritance tax (IHT). It's a significant change, but one that doesn’t remove the underlying tax advantages of holding commercial property in a registered pension scheme.

A Self-Invested Personal Pension (SIPP) or Small Self-Administered Scheme (SSAS) gives individuals and business owners a strong degree of control over their pension investments, offering a tax-efficient way to buy commercial property. The property can then be leased to the member’s business or to a third-party tenant. Rental income received and investment gains made within the scheme are generally exempt from income tax and capital gains tax and, for a double tax benefit, where the investor’s trading company is tenant, the rent will generally be an