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Monday, December 07, 2009

Using your SIPP for investing in development opportunities

Landlords may be not aware but it is now possible to manage their own pension funds by transferring them into a Self Invested Personal Pension (SIPP).

This does include direct investment in commercial property. It is not possible to invest your pension in a buy-to-let property.

However, for developer landlords there could be an opportunity to acquire property for future development.

Often potential development sites are in commercial use, but may have planning permission granted or indeed could potentially receive planning permission for a residential buy-to-let development.

In this case there appears nothing stopping a landlord to acquire a development site in their pension whilst the suitable permissions and pre-development works are undertaken. This means that their liquid funds are not tied up in holding a development site. Once any development is about to be undertaken then they will have to sell the property either in the open market or where they are going to carry out the development, back to themselves.

I have not taken legal advice on this, but it seems on the face of it a reasonable approach for a developer landord. It would be good to get your views and peoples experience on this.

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