Which Commercial Finane News Archive

Specialist SIPP’s designed to compliment business owners funding strategies have experienced a marked reduction in charges recently, bringing the charges in line with the charges of standard SIPP products. This change in charges will make the ability of these specialist SIPP investments to interact with business assets, more attractive to a wider audience at time when raising business funding is a challenge.

The specialist SIPP provider charges can be as low as £350 per annum, with no set up fee. Advisor charges and ancillary investment charges are separate. However, the scope of investment will open up new opportunities for many investors, previously put off by SIPP charges for specialist business investment mechanisms.

The investments most commonly interacting with a SIPP investors business are:

• Commercial Property Purchase
• Intellectual Property Purchase (i.e. TM, domain name, patent)
• Share Purchase

Commercial property purchases and share purchases have been available through SIPP’s with low charges, it is the ability to invest in Intellectual property which has traditionally been associated with higher charges. The ability to purchase intellectual property from a business or individual enables asset value with a business to grow in tax efficient wrapper, whist providing a cash injection through the intellectual property purchase. This could make investment interaction with a SIPP a valuable funding mechanism in the current economic climate.

Whilst charges are now making SIPP intellectual property investments more attractive, it is important to seek professional advice. Tax implications and the specifics of an individual business will all determine if this is an appropriate SIPP investment.

If you would like further information and advice on how to maximise the potential for SIPP business interaction, please contact us.

Low cost SIPP’s are a cost effective and tax efficient form of retirement planning. In the past, Low cost SIPP’s have been limited in their investment choices in order to achieve their low cost charging structures. A full SIPP which can allow investments to interact the members businesses, have until now been tailored to the individual and therefore more expensive to setup and administer. Higher costs reflected the fact that investment in a business asset is unique to the individual SIPP and not an open market investment open to all.

A small number of SIPP providers have now developed the capability to utilise Low costs SIPP’s for business owners and the self employed, which can fully interact with business and personal assets. These low cost SIPP’s can be syndicated to enable 2 or more low cost SIPP’s to interact with a single investment.

These investment choices include:

• Intellectual Property Purchase (i.e. TM, domain name and patents)
• Commercial Property Purchase
• Share Purchase

Low cost SIPPs facilitating these business focused investments, can now be facilitated by low cost SIPP providers with no set up fee and an annual administration charges of £350 or less. This is making low Cost SIPPS for business investment purposes a more viable mechanism for business owners to utilise. Low cost SIPP investors must however must consider advisory, legal and valuation fees within the low cost SIPP, these will be similar to fees for investing outside of the low cost SIPP.

A key benefit for business owners is that low cost SIPP’s can now provide cash flow to businesses through their investment flexibility, giving businesses greater financial freedom and opportunity. Low cost SIPP’s investing in business assets also offer active management of retirement planning, aiding a diverse retirement portfolio.

For information and advice regarding low cost SIPP’s, please contact us.

SIPP investments provide increased flexibility over person pension plan investment choices, making them a popular choice of pension scheme. Individual SIPP investments are undertaken for varying reasons, but in the main because the SIPP investor has investment knowledge and understands the risk, reward and volatility associated with specific SIPP investments.

Many business owners save in part for their retirement through SIPP investments, a greater understanding of the risk and volatility of investing are part of business ownership, in many cases this gives business owners the confidence to undertake more volatile and risky SIPP investments. However, a specific group of SIPP investments very few business owners are aware of are the SIPP investments which interact with their business. Most business owners are aware of SIPP investments in commercial property, but there are two more commonly advised upon SIPP investments able to make funding available to businesses:

1. Share Purchase – SIPP investments can be used to purchase company shares, providing working capital to a business, gaining value through the ongoing success of the business.

2. Intellectual Property Purchase – Trademarks, domain names and patents can all be utilised as SIPP investments, again providing a business with working capital from the sale of the asset, with the SIPP profiting from associated lease agreements.

Many business owners are turning to SIPP investments as part of their corporate financial planning, as SIPP investments can provide a powerful business funding mechanism that does not rely upon the banks and other third party financiers.

For the right business, SIPP investments in the investors own business may reduce the level of risk and volatility associated with SIPP investments whilst producing known rewards. For more information and advice regarding SIPP investments, please contact us.

There have been many pension changes recently, for most owner directors, the most high profile pension changes will be in respect of employee pension changes and the arrival of NEST, or, a suitably advised alternative. Business owners also have the opportunity to make valuable pension changes to benefit themselves through greater interaction with their pension funds. Pension changes which can enable pension fund investment within their business. This ability is not new, however, it is becoming more relevant to a wider audience of business owners in the current economic climate.

The use of a SIPP or SSAS pension changes the scope of pension investment opportunity available to business owners. For the right business, meeting criteria set out in legislation, business owners can make investment choices which will have a direct impact on upon their business as well as their pension fund. Some of the main business funding investment mechanisms include:

• Commercial Loan (SSAS)
• Commercial Property Purchase
• Intellectual Property Purchase (ie – TM and Domain Name)
• Share Purchase (SIPP)

The pension changes the structure of finance within the business, providing greater flexibility and financial independence for business owners. Subject to specialist advice, the pension changes can facilitate multiple business investment interactions within company and provide a very powerful tax mitigation mechanism under current legislation.

In the current economic climate, many owner directors are finding that a reduced reliance upon third party funding is essential in providing stability. A SSAS or SIPP can aid this whilst their pensions are receiving known returns from the investment of scheme assets within their business.

For more information and specialist SSAS and SIPP advice, please contact us.

The SIPP has proved an invaluable tool for both businesses and individuals to purchase commercial property. SIPP commercial property purchases are a very popular method of self investment, property is seen by many as a secure investment for retirement, rental yields can be reinvested for further growth and utilised as part of an income strategy in retirement.

For the right client, the SIPP can provide much more than just a SIPP commercial property purchase. A SIPP can also invest in intellectual property which can enable the SIPP investor to purchase trademarks, domain names and copyrights. This is a powerful mechanism for releasing insured funds and rental returns back into businesses, both sole traders and limited companies, to meet financial needs.

For advice regarding SIPP commercial property purchases and the ability to utilise intellectual property within a SIPP, please contact us.

Self Invested Personal Pensions (SIPP’s) and Small Self Administered Pension Schemes (SSAS) can invest in a range of investment options not available to personal pensions. Key to this for many investors is the ability of both the SSAS and SIPP to invest in commercial property. The main benefits are:

-The SSAS and SIPP can raise a commercial mortgage; the maximum allowable borrowing under HMRC rules is 50% of the scheme net  asset value.

-Rental repayments in respect of the commercial property are deductable as a business expense and can therefore mitigate  company’s tax liability.

-Funds within the scheme can be utilised to cover costs associated with the commercial property. For instance, legal fees or general  maintenance.

-Rental yields onwardly invested within a SSAS or SIPP grow tax efficiently.

-Equity growth in commercial property is not subject to taxation within a SSAS or a SIPP wrapper.

-A commercial property is creditor protected in a SSAS or SIPP wrapper.

If the net asset value within a SSAS or SIPP is too low to enable the pension scheme to purchase a commercial property, it is possible to utilise intangible business assets contributions to increase the net asset value of the SSAS or SIPP. This method can increase the mortgage capability of the SSAS or SIPP to achieve a commercial property investment. However, it is important to take specialist advice as to feasibility of this method due to the nature of the intellectual property, potential tax issues and the specific issues relating to individual businesses.

An advantage of the Small Self Administered Pension Scheme is its ability to make a commercial loan available to the sponsoring employer. This can be of benefit where commercial property rental repayments have accumulated within the SSAS and the sponsoring employer requires working capital. Small Self Administered Scheme rules therefore provide flexibility to invest on an ongoing basis, allowing sponsoring employers to access SSAS commercial property rental yields which can aid a company’s financial independence.

SSAS scheme rules enable the SSAS member trustees to choose a commercial loan as an investment option. A commercial loan of up to 50% of SSAS scheme assets is allowable under SSAS scheme rules and can be made to the sponsoring employer. The term of a SSAS commercial loan can be a maximum of 60 months and a Small Self Administered Pension Scheme commercial loan has to be repaid on a capital and interest basis. SSAS commercial loan interest charges are determined by HMRC and are should be no lower than 1% over the average base rate of the leading banks. It is also an HMRC requirement that the loan is secured against and asset at least equal to the capital and interest elements of the SSAS commercial loan.

For further information and advice on SSAS and SIPP pension schemes, their ability to invest in commercial property and interact with your business, please contact us.

A SIPP (Self Invested Personal Pension) is a personal pension that provides the pension investor with greater investment flexibility than a personal pension, including the ability to invest the members own business.

Pension asset allocation will determine the long term performance of a SIPP. Greater choice in pension asset allocation within a SIPP can provide individuals greater ability to influence the long term performance of SIPP investments.

SIPP rules provide members with more choice and flexibility through the wide range SIPP investments. SIPP rules allow for self invested pensions to utilise traditional pension investments funds but also provide a range of additional SIPP investment opportunities. SIPP rules also enable a SIPP to invest in quoted and unquoted equities and pooled funds. A SIPP is attractive to many as SIPP rules allow SIPP investments to interact with the members business.

SIPP rules regarding SIPP investments in owner operated businesses have proved extremely beneficial during the current economic climate. There is currently a boom in self invested pensions, which in part could be due to the lack of business funding being made available by the banks and the long term outlook for 3^rd party businesses funding. A SIPP has the ability to spread pension asset allocation amongst commercial assets including commercial property, unquoted shares and intellectual property.

Intellectual property as a SIPP investment can take various forms under SIPP rules. SIPP investments can include trademarks, domain names, patents and copyrights. The SIPP investment most widely understood under SIPP rules is the ability to purchase commercial property as part of the pension asset allocation. The key benefits of owning commercial property in a SIPP is the ability to raise a trustee mortgage within a tax efficient, creditor protected wrapper.

For more information regarding SIPP investment opportunities, please contact us.