Self administered pension

louise1985

Hi All,

I'm completing an assignment and hoping someone can help. The director in the question is setting up a small self administered pension arrangement. She wants to purchase a property in Spain using the pension scheme. She wishes to rent the property in Spain at market value every August.
I know that a condition of a pension scheme purchasing a property is that it is not for disposal or letting to employer including directors.
My query is does she break this condition as it is only for a month and she is paying the market value.

I'd appreciate any advice on this?

Thanks,

Henry Ford III

louise1985 wrote: »

Hi All,

I'm completing an assignment and hoping someone can help. The director in the question is setting up a small self administered pension arrangement. She wants to purchase a property in Spain using the pension scheme. She wishes to rent the property in Spain at market value every August.
I know that a condition of a pension scheme purchasing a property is that it is not for disposal or letting to employer including directors.
My query is does she break this condition as it is only for a month and she is paying the market value.

I'd appreciate any advice on this?

Thanks,

Holiday homes are specifically not allowed to be owned by small SSAP's.

The reason why is because their use is wide open to abuse I believe. You can't include stuff like classic cars, wine, and cigars for similar reasons.

louise1985

Thanks for that. I know oversees property can be owned by a pension scheme as long as there is Revenue approved trustee appointed to controlling the asset thus ensuring it is held as per Revenue guidelines .

Hani Kosti

In theory yes she can. However the issue might arise as to how the Trustee will control the property. I've seen several properties overseas not being purchased as the contract couldn't be drafted for Trustees (seller didn't recognize such entity).
Did I understand correctly that the client (who is setting up the scheme) wants to rent the property (at market value)? If so this wouldn't be allowed, arm length!

louise1985

Thanks for that.
Just to confirm the scheme can purchase the property however the director is not allowed rent the property for even a short period of time for market value.

In my assignment I said by the director wishing to rent property it doesn’t qualify as eligible property for the penaion scheme to purchase

Liam D Ferguson

Revenue have this to say about overseas property: -

"Purchase of overseas property will only be permitted where there are
appropriate arrangements in place to enable the Pensioneer Trustee to
maintain control of the asset to ensure that Revenue rules are complied with."

In practice, this will be a difficult one to get past as a Pensioneer Trustee will be reluctant to take on the responsibility of making sure that the client is NOT sneaking out to Spain to spend a few days there.

In any event, the idea of the client renting the property from her own self-administered pension scheme is a definite NO, regardless of what rent she's poposing to pay or how short the period.

louise1985

Thanks very much all for the replies appreciate it