Buying, leasing, developing or selling a commercial property using a SIPP can be complex and requires specialist advice from Financial Advisor. However, where property is involved there is usually a role for an RICS Registered Valuer.
All SIPP property transactions must satisfy HM Revenue and Customs (HMRC) and other regulatory requirements, which may vary from time to time.
A SIPP can be used to purchase freehold or leasehold property. For a leasehold property, the lease must have at least fifty years remaining, at a nominal ground rent and with no difficult agreements in place.
A property can be purchased from, leased to, and/or sold to, a connected person or a connected company. All of these transactions, including the terms of the lease, must be on an arm’s length basis to satisfy HMRC legislation. This means the purchase price, rental amount or sale price must be supported by an independent open market valuation which must meet the standards set out in the survey section of this guide. This is where the RICS Registered Valuer is able to assist.
The property must be valued on various events such as purchase, rent review, taking benefits and sale. The valuation should show the open market valuation and rental valuation, although the latter is not needed where the property is being sold. Valuations must be by a registered valuer of the Royal Institution of Chartered Surveyors (RICS), and the report should be produced in accordance with the relevant sections of the RICS valuation standards at that time and take into account any environmental requirements they may set. If the property is being sold to a connected party the sale price must be supported by a recent open market valuation prepared by a RICS qualified surveyor, otherwise it can be sold at the best price obtainable.
To discuss your valuation requirements contact Mr Lloyd’s Smale, FRICS, RICS Registered Valuer at Carter Geering on 01363 773757, mobile (07535) 099660 or by email: firstname.lastname@example.org .