How West Riding Personal Financial Solutions Ltd Bought West Riding House Using a Small Self-Administered Scheme (SSAS) Pension Fund
This case study shows how we used our pension fund to buy our business premises. We had been thinking of moving our office premises for a while when we heard the freehold of ‘Prudential Buildings’ was up for sale with tenants on the ground floor who between them were paying £17,000pa in rent, and two empty floors above totalling around 1200 square feet of what would be usable space once renovated. We agreed a purchase price of £180,000, and figured we’d need to spend £40,000 on renovations. Pre-renovation with only the ground floor occupied the rent equated to a yield of 9.44% on the purchase price. Post-renovation we estimated our rent at £8,800pa which, based on a total projected cost of £220,000, meant a yield of 11.72% for our pension fund. The rent is treated as investment income and not as a contribution, so we can have the company pay our pension contributions on top of the rent. To fund renovations in effect the company lent the scheme the money and then the scheme repaid the borrowing – that’s the £240 item below on 8th August 2018 for the work around the scheme repaying West Riding. Renovation costs were on budget and schedule, completed 16 months precisely from the date the purchase was completed.
Previously we had SIPPs with Fidelity. We transferred those into the SSAS and then made some hefty contributions from our reserves to increase the joint SSAS fund to the point where it was enough to make the buy.
In the first two years the running fees (excluding fund manager fees which are the same for a SSAS or SIPP) were as below. The £240 charge was a one-off re’ the work around repaying the company’s loan to the scheme, incurred by way of it paying ad-hoc for the renovation costs.
| Date | Description | Cost | Analysis |
| 24-Oct-16 | SOLICITORS | £300.00 | Legals re’ conveyancing (Deposit) |
| 27-Jan-17 | IPM SSAS ADMIN | £900.00 | SSAS set-up fees |
| 01-Mar-17 | SOLICITORS | £1,817.28 | Legals re’ conveyancing (Balance) |
| 26-May-17 | IPM SSAS ADMIN | £360.00 | 2016-17 Scheme return inc. VAT |
| 22-Jun-18 | IPM SSAS ADMIN | £1,048.80 | SSAS Admin / Trustee Fees |
| 08-Aug-18 | IPM SSAS ADMIN | £240.00 | Lease and borrowings work |
| Total to date… | £4,666.08 |
