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If you have a self-invested personal pension (SIPP) you have the choice to invest in a range of assets, including commercial property. Commercial property offers potential for capital growth and a regular income, so investing like this is a great way for small businesses to attract tax advantages. Remember, you can only buy commercial property through your fund, but potentially that means you can purchase offices, warehouses and even stables; hotels, prisons, care homes and public houses; there are opportunities for overseas commercial properties too, but you must meet pension legislation requirements.


  • Tax relief on contributions paid into your SIPP;
  • Exemption from capital gains tax when the property is sold;
  • Exemption from income tax on any rental payments;
  • Increased cash flow if property is purchased from you or your company;
  • The property forms an asset of your SIPP so creditors do not have access to it.


  • It’s a very good option, but you should be aware of some of the drawbacks
  • Administration charges can be expensive, the bigger the fund the smaller the charges in percentage terms. Costs may be higher for more active investors;
  • If your business folds your pension fund loses its tenant;
  • Your fund may be forced to sell the property at the wrong time.
  • This must be seen as a long-term investment as there are restrictions on transferring the property back to your business later.

Business prospects

There are more advantages than disadvantages to buying commercial property through SIPPs. It’s becoming a popular means to raise finance for business expansion or other investments. Even if you don’t have enough money to buy the property outright, using a SIPP to fund a deposit is a great tactic to access finance without removing essential capital from your business. Despite the rise in commercial property prices they are still seen as a good investment, helping to keep your business stable in the current economy, or perhaps expanding to other locations by leasing or buying.

How to go about it

IF you don’t yet have a SIPP, it must be set up by a financial institution regulated by the FSA to provide the pension tax-shelter. The investments can be managed either by you or by an independent company, but purchasing property through a pension arrangement can be complex and requires a detailed knowledge of HMRC’s rules and other regulatory requirements.

DNS can help you all the way: we will put you in touch with trusted providers; help you find the right property and give you the professional advice and support you need to manage your investments. We’ll even take you through the purchase process and ensure you avoid the pitfalls of buying property assets through SIPPs.

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