Commercial property pension schemes
Commercial properties can be purchased by the investors through pension schemes and mortgages. Making use of your organization as source of pension fund and buying a commercial property is a profitable idea to your company.
Tenants can avail more benefits if and only if the company which is sponsoring the funds remains to be a tenant until the contract period, else there will be a negative influence on the investment.
What are the tax beneficial investments? Dc Fawcett explains in brief.
- Own a commercial property through pension funds
- No capital gains tax
- Rent is tax free
- Mortgages can be paid faster
- For tenants, the rent can be used as source of retirement fund.
- life insurance schemes are noteworthy
- Inheritance tax can be insured
Dc Fawcett complaints about the investors that they aren’t aware of borrowing money for the investment is bound to risk because the investment growth doesn’t have a potential to exceed the interest rate of the borrowed amount.
When the mortgage is paid off, the money can be used for purchasing commercial properties or renting out the properties which will be another form of great investment.
At the verge of retirement, you are free from mortgage and you continue to receive cash flow through these properties purchased already and when you sell off these properties, it is tax free.
When corporation tax is filed more than you need to pay, it is a scam. Consult a financial adviser to know more about pension funds and what are the possible fraudulent activities involved, he can also assist you in case of any tax obligations that can be reduced.
Apart from this, the investor should understand the ongoing market and the risk scenarios. Illiquidity is common in real estate; at those circumstances selling a property becomes a herculean task and there will be no cash flow. The risk gets even more severe when there is no appreciation in the property value.
The two types of pension plans are Self invested pension plan is SIPP and Small Self-Administered Schemes is SSAS and together known as investment regulated pension schemes.
The investor is entitled to choose whether pension savings are required to be invested or not. It offers variety of investment options for the investors which is the ultimate commercial property investment. The personal pension scheme is not having such benefits. Investors below aged 55 cannot avail this scheme.
You can learn more about commercial property trends in DC Fawcett virtual real estate investing club.