Commercial mortgages, or owner-occupier Business Mortgages, are for individuals and companies purchasing or re-mortgaging a property to be used as their own business premises.
Renting commercial premises is not the right fit for everyone. Sometimes a business wants the security and certainty of owning its own premises, or property may come on the market that is just too good to pass up.
If you do purchase premises for your business, it is likely to be one of the bigger investments your company is going to make and not all businesses will have/want to use spare cash in the business to purchase the property outright. This is where Commercial Mortgages can help.
Whatever your motivation for purchasing commercial premises for use in your business, make sure that you have the right professional team around you.
Lending criteria on commercial premises are often more stringent than for residential premises and may come as a surprise, in particular to first-time commercial borrowers. The paperwork and criteria can seem insurmountable. This is why you need an experienced lawyer in your corner who has dealt with the process many times before.
A SIPP is a self-invested personal pension platform that can hold commercial property.
A SIPP can buy UK non-residential property including offices, industrial, shops, restaurants, gyms, development land, care homes, and sports stadiums.
A SIPP cannot buy overseas property, residential property, or plant and machinery.
Choosing to invest in commercial property using a SIPP enables you to benefit from tax relief on your SIPP contributions, exemption from CGT when the property is sold and exemption from income tax on rental payments. SIPPs are also generally outside the investor’s estate for IHT purposes.
Many people also transfer commercial property held in the business to a SIPP so as to improve cash flow in the business by moving the capital asset into the pension in return for cash but continuing occupation for the business by way of a lease. The rent should also be deductible from the trading profits of the tenant business.
In the event of insolvency, a SIPP will generally be outside the reach of a trustee in bankruptcy.
A typical SIPP structure will involve a purchase in the SIPP followed by a lease to the business and possibly some mortgage funding.
A SIPP can borrow money from banks but pension legislation means that the SIPP borrowing is limited to 50% of the SIPP’s fund value.
Some SIPP providers also enable shared ownership of commercial property with the trading company or investor.
Attwells Solicitors are specialists in acting for all of the country’s leading SIPP providers. Attwells’ commercial property team buy, sell, mortgage and lease commercial properties for clients involving SIPPs.