Property in a pension

[JeffreyD]

I've got an office building in a pension that's currently leased and I'm just making some plans for when the lease ends as I know the tenant will move out (they've been trying to terminate for ages)

The building would make a superb house with relatively easy work eg installation of a better kitchen and some proper bathrooms

I am aware I can't hold residential in a pension but at what stage do I need to transfer out? Before the change of use being granted or after?
Could I do all the work and apply for the change of use before transferring from the pension?

It will achieve much more value as a mortgageable house than a commercial premises with potential.

Thanks in advance.

[darreni]

How do you transfer it out? Do you need to pay market value to the pension?

[JeffreyD]

Ideally I'd sell on the open market out of the pension. It will be worth more as a finished house as the market will be considerably larger.

Otherwise I'd have to buy it, do it up and sell it. With all the costs involved - stamp and CGT at least.

[AlBondigaz]

Is it worth getting planning permission for residential use and full conversion plans drawn up, then selling at that point?

Might increase the value without the risk of doing the conversion yourself. The building still remains as a commercial unit in your SIPP / pension.

[JeffreyD]

AlBondigaz said:

Is it worth getting planning permission for residential use and full conversion plans drawn up, then selling at that point?

Might increase the value without the risk of doing the conversion yourself. The building still remains as a commercial unit in your SIPP / pension.

At that stage it won't be mortgageable to a normal punter.

Plus the new rules means you don't really need full planning to convert. It's done on the nod by "prior consent"

I suppose my question is what happens if I convert it to a house then sell. Do I get a penalty?