LTD company and pensions...

[Jasandjules]

Can I assume that I am limited as to what I could purchase for a "company pension" i.e. could I buy a property for my pension?

[andyb28]

Only commercial premises

[Jockman]

You can hold land for residential purposes but IIRC it must be removed before any planning stage.

Remember you need to have the funds in the pension to buy the property in the first place. We required approx 50% then used a recycling method to fill up previous years of unused allowances.

If you intend operating a SSAS structure, PurpleMoonlight is very knowledgeable here.

[Jasandjules]

Does that mean I need to have sufficient cash to buy the place outright? Or just cover the mortgage payments?

[PurpleMoonlight]

The pension arrangement can only borrow up to 50% of it's value before the purchase. So if it's worth £100,000 you can borrow £50,000.

From a pension perspective you don't need to actually use the £100,000 for the purchase and could use just the £50,000 but lenders will have their own requirements meaning that you likely will have to use at least some, typically 70% LTV.

Lenders will want the rent to cover the mortgage repayments and likely a lease in place for the term of the loan.

[Jasandjules]

Hmm. Not as easy as I had hoped (no surprise there I guess).

I am assuming I can't simply get a mortgage in my name, then assign the cost of the mortgage payments to myself as a pension?

[PurpleMoonlight]

Correct, you can't.

[Jasandjules]

Fiddlesticks.. Back to the drawing board then!

[sideways sid]

You mention Ltd Co. If you have cash and/or borrowing capacity within your Ltd Co, that could buy the property. You might need to provide security &/or a personal guarantee if you are sole shareholder.

It is possible that the Ltd Co could in future contribute the property to your pension fund but you would need to take proper advice.

[Jasandjules]

I was thinking perhaps a personal guarantee on the mortgage with the company paying it as my pension.........

But there is not enough money in the company to buy a house outright.