Ways to hold commercial property in a SIPP

Three Distinct Structures

How do we hold commercial property?

Your Future SIPP

You may be aware that in the SIPP commercial property investment market, it is somewhat unusual not to hold property in a trust structure, meaning that the SIPP provider holds the property on trust for the pension. Curtis Banks’ Your Future SIPP holds property via a Trustee Investment Plan (TIP), meaning we hold the property for and on behalf of the client(s), in the name of Suffolk Life Annuities Limited, a wholly owned subsidiary of Curtis Banks.

The reason that we do this is to enable clients to be more flexible with the ownership of their property investment. For example, if a client with a Your Future SIPP was to sell the whole of their SIPP’s ownership in a property, or a proportion thereof, to another Your Future SIPP client, there would be:

  • No VAT liability
  • No Stamp Duty Land Tax payable
  • No transfer of legal title
  • No change of landlord to any tenant

Additionally, by holding a property via a TIP, this enables the Curtis Banks annual property fees to be exempt from VAT.

With Your Future SIPP, there are three ways in which clients can invest in commercial property, which are outlined below.

More information about the way in which Curtis Banks holds property can be found in our Property Guide. Please be aware that we may hold property differently for other products administered by us.

Individual Commercial Property Purchases

A client can purchase and hold the entirety of a commercial property. The purchase can be funded by transfers, contributions or disinvestments within the SIPP, or borrowing from a high street lender (or a combination of the two).

The property would be purchased in the name of Suffolk Life Annuities Limited, a wholly owned Curtis Banks subsidiary company, for and on behalf of the client’s pension.

Further information about borrowing to facilitate commercial property transactions, please refer to our Property Guide.

Your Future SIPP Property Guide

Group Commercial Property Purchases

A group purchase is where the entirety of the property is acquired by more than one Curtis Banks client.

The ownership shares in the property do not have to be equal between the syndicate members. Funding for this type of transaction can be by way of cash in the SIPPs, borrowing from a high street lender, or a combination of the two. If a number of clients require borrowing to fund the purchase only one loan agreement is required and we internally apportion liability for the loan between the various SIPPs.

For these types of commercial property investments, an additional document will be required as part of the purchase process. This document is called a Group Investment Agreement, and outlines the property ownership and debt shares of each SIPP, as well as the dealings and disposal process.

The property would be purchased in the name of Suffolk Life Annuities Limited, a wholly owned Curtis Banks subsidiary company, for and on behalf of the clients’ pensions.

Joint Property Purchases

Curtis Banks do allow for clients to acquire a partial interest in a commercial property via a SIPP. When purchasing a commercial property via a SIPP with Curtis Banks, the legal title of the property is held collectively by all purchasers, including the SIPP and non-SIPP owners.

You can have up to 4 names on the legal title as joint owners. One of these parties will be Suffolk Life Annuities Limited, for an on behalf of the SIPP. The other owners may be the client personally, a party connected to them, a company, or a third party.

For these purchases a trust deed is established between the invested parties which outlines the allocated property ownership shares of Curtis Banks (on behalf of the invested SIPPs) and the other invested parties. The trust deed will also outline the obligations and responsibilities of all invested parties.

For jointly owned properties, we will require a third party property manager to be appointed to update us with the income and expenditure associated with the property and pay funds to Curtis Banks on a regular basis. If the property is VAT elected, a third party accountant will be required also.


Nominee Property Structure

We have previously offered an alternative holding structure, called a Nominee Structure.

A Nominee structure referred to a property where Curtis Banks owned a part interest in the property, but the legal title was held solely by one or more third parties (for example, our client or their company). We no longer offer the ability to acquire a property via this structure, however existing clients who hold property with us under a nominee structure are able to buy further or remainder shares via their SIPP with us. Please see our Further or Remaining Property Share Purchase Form for more information about these transaction types.