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SIPPS – a pension goldmine or minefield?

by Darron Barker, Director of Dunlop Heywood Newcastle

I have been pretty busy lately on a growing list of valuations of commercial properties for the benefit of SIPP (Self Invested Personal Pension) providers. They represent a growing number of property owners wishing to let the property back to their business with the rental income going straight their own SIPP.

Sounds straightforward but as with any pension option there is a raft of caveats to take into consideration.

A lot of the time the trigger for a valuation is the property owners who are gazing into the not so distant future of retirement and realise their pension pot is looking at little on the light side.

Owner occupiers with factory premises or offices are potentially sat on a little pension goldmine but many simply haven’t got round to it as it’s not a crucial day to day business matter that demands their immediate attention.

Even if they do have a SIPP some providers demand annual or even up to tri-annual revaluation and that’s where I come in.

It was only last year where we saw the third thematic review of SIPPs. What has since come out of that? Two points really - due diligence on investments and prudential requirements (aka: capital adequacy). So despite the big fanfare at the time we are still groaning – not again!

It looks like the third review overall gathered sufficient detail to see the extent of SIPP investment issues - but these largely pre-dated the initial capital adequacy proposals and were concentrated in certain books.

From time to time, investments will fail - including mainstream ones. At some point, providers of SIPPs will be judged as having done their bit after all, or lawyers will be rubbing their hands with anticipation of a SIPPs free for all.

In the meantime, I will still be busy at the coalface of SIPP revaluations with a growing list of office blocks and factories to tour across the North East!

This was posted in Bdaily's Members' News section by Dunlop Heywood .