Pensions including SIPP and SSAS for landlords and property investors

November 20, 2018

UK landlords may wish to use their pensions to make investments they control. It is impossible to do this with a standard employment-based pension or one that is with a wealth management company.

A pension has a tax advantage. Landlords and property investors can contribute towards a pension and get tax relief. The pension contributions made in a tax year are limited to £40,000 gross. It is possible to go back three tax years, meaning landlords and property investors may contribute up to £160,000 into a pension.

There are two types of pensions that UK landlords and property investors ought to be aware of. The first is Self-Invested Personal Pensions (SIPP), regulated by the Financial Conduct Authority (FCA).

The second pension option is a small self-administered scheme (SSAS) regulated by the Pension Regulation Authority (PRA).

Both SSAS and SIPP pensions provide the tax benefits of pension contributions. An individual making pension contributions will get income tax relief. An employer that makes pension contributions on behalf of their employees gets a corporation tax relief.

Pensions have the added benefit of not having to pay Inheritance Tax on the value when transferred to their heirs upon their death. Pensions do not pay income tax on the earnings generated nor Capital Gains Tax (CGT) on asset disposals.

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