Commercial Property SIPP and emerging IHT rules...
Discussion
Haven't seen any discussion on this (admittedly niche) topic..
If the holder of a SIPP containing a Commercial Property dies under the emerging IHT rules, what potential outcomes are possible?
Assuming that there an overall IHT liability, would the SIPP provider have to rustle-up the pro-rata IHT due in respect of this specific pension asset?
I guess that even if there was 'no cash' within the SIPP at the point of death, the future cashflows that may be being generated could be allowed to accumulate and could be used to pay-off any outstanding debt and/or cover the IHT due on the net pension asset.
Sounds messy, one way or another....
If the holder of a SIPP containing a Commercial Property dies under the emerging IHT rules, what potential outcomes are possible?
Assuming that there an overall IHT liability, would the SIPP provider have to rustle-up the pro-rata IHT due in respect of this specific pension asset?
I guess that even if there was 'no cash' within the SIPP at the point of death, the future cashflows that may be being generated could be allowed to accumulate and could be used to pay-off any outstanding debt and/or cover the IHT due on the net pension asset.
Sounds messy, one way or another....
How can one individual's SIPP contain a property directly held by multiple owners?
Is a SIPP able to directly own a quarter of a property? Or would the SIPP be invested in a separate vehicle which owns the property?
In the latter case the 25% holding in the separate vehicle would simply be sold and cash proceeds used to pay IHT. No change of ownership of the property itself.
Is a SIPP able to directly own a quarter of a property? Or would the SIPP be invested in a separate vehicle which owns the property?
In the latter case the 25% holding in the separate vehicle would simply be sold and cash proceeds used to pay IHT. No change of ownership of the property itself.
Panamax said:
How can one individual's SIPP contain a property directly held by multiple owners?
Is a SIPP able to directly own a quarter of a property? Or would the SIPP be invested in a separate vehicle which owns the property?
In the latter case the 25% holding in the separate vehicle would simply be sold and cash proceeds used to pay IHT. No change of ownership of the property itself.
It can certainly hold 50% of a property so I presume 25% is possible.Is a SIPP able to directly own a quarter of a property? Or would the SIPP be invested in a separate vehicle which owns the property?
In the latter case the 25% holding in the separate vehicle would simply be sold and cash proceeds used to pay IHT. No change of ownership of the property itself.
An interesting question is - how much is half a property worth? Potentially the square root of f
k all.Much like a minority shareholding in a business.
Well a SIPP, by definition, can only be opened by an individual but yes, a SIPP could own a share in a commercial property.
There are also SSASs where individuals come together to jointly own assets (which could include commercial property) e.g. husband and wife could jointly open a SSAS to hold a Commercial property that becomes a jointly held pension asset....
There are also SSASs where individuals come together to jointly own assets (which could include commercial property) e.g. husband and wife could jointly open a SSAS to hold a Commercial property that becomes a jointly held pension asset....
Mogul said:
Well a SIPP, by definition, can only be opened by an individual but yes, a SIPP could own a share in a commercial property.
There are also SSASs where individuals come together to jointly own assets (which could include commercial property) e.g. husband and wife could jointly open a SSAS to hold a Commercial property that becomes a jointly held pension asset....
It does raise an interesting question about the value of a minority stake.There are also SSASs where individuals come together to jointly own assets (which could include commercial property) e.g. husband and wife could jointly open a SSAS to hold a Commercial property that becomes a jointly held pension asset....
There's generally a significant discount for a minority stake in a business and who would want to buy half a property with someone they don't know?
isleofthorns said:
what happens if the ssas owns part or all of the property used by the sipped-owners business.
if the business owner dies, not only will the estate be due IHT, it may be that the SIPP will be forced to sell the property to satisfy their IHT obligations?!
No one knows as the legislation hasn't been published if the business owner dies, not only will the estate be due IHT, it may be that the SIPP will be forced to sell the property to satisfy their IHT obligations?!
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