Case study

Purchase of property and land

  

Mr Rose has worked for many years and has built up his personal wealth to the extent that he is now ready to take a reduced role in his company and purchase the ideal retirement property.

A desirable property has been identified, however it comes with a sizeable piece of land. The land is fenced off from the property and has its own access from the highway. However, the vendor is only prepared to sell both together.

Mr Rose is keen to secure both, but wary that the full outlay will reduce the liquid funds available for his retirement. 

Mr Rose has a personal pension that he has not yet needed to take funds from, as there has been no need to access it, as he has the drawings from the business. 

The solution is therefore to use personal funds to complete the purchase. As the conveyance is being worked through, in the background, Mr Rose is using his company to sponsor the establishment of  a new SSAS. The SSAS will then accept a transfer of benefits from the personal pension and, following this, the SSAS will reimburse him for the land purchase. 

Mr Rose therefore arranges for a surveyor to confirm the appropriate split between the property and land. Immediately after the initial purchase he arranges for the newly established SSAS to purchase the land at the market value confirmed by the surveyor.

The SSAS then receives an investment yield from stables that are on the land from which a horse riding business is operating. The business is ticking over but is not doing very well. Mr Rose has a hobby of breeding prize-winning pigs and the fallback option for the land is to use the balance of the SSAS funds to convert the stables to a piggery. For this to happen, the SSAS would need to receive a greater rent than present to justify the outlay and Mr Rose would need to pay the market rent for the buildings as assessed by a RICS surveyor. For the time being Mr Rose is happy for the riding tenancy to run its course.