Purchasing business premises
Keith was the Director of a security business. He was 50 when he first came to us for advice, as he wished to purchase premises for his company. An opportunity had arisen to purchase the property they currently rented at an attractive price.
Unfortunately, Keith didn’t have sufficient personal or company funds in order to do so; understandably, he did not want to take the route of borrowing extensively from the bank.
What did we do
Keith had a number of small pension policies that he had accumulated from previous employers. He also had an existing endowment policy which had gone past its maturity date.
We established a Self-Invested Personal Pension for Keith and transferred in the value of the pension policies. We encashed the endowment and introduced the funds into the business. This then became a pension contribution, which saved Keith paying large amounts of corporation tax.
The combined total was sufficient; Keith’s pension plan could purchase the property. The property was let to the company and all rent flowed back to the pension to increase its value.
Keith was extremely pleased to be able to purchase the property without bank finance.
He feels much more secure now that the business has proper premises. Additionally, we have created a tax-efficient investment through his Self-Invested Personal Pension, which will allow Keith to build up funds to eventually use for retirement.