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JGM
JGM, Solicitor
Category: Property Law
Satisfied Customers: 10649
Experience:  30 years experience in property law.
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, I have a SIPP pension arrangement invested in a commercial

Resolved Question:

Hello,
I have a SIPP pension arrangement invested in a commercial property.
I have arranged to sell the rear section of the property to another individual by means of creating a new 999 year lease therefore effectively taking the rear section out of the SIPP.
The SIPP pension company will still own the freehold to the building.
What restrictions on use i.e. residential, if any, will be placed on the rear section I am selling off ?
The person purchasing wants to convert it to a one bed flat.
It has its own separate entrance etc.
many thanks
JA
Submitted: 2 years ago.
Category: Property Law
Expert:  JGM replied 2 years ago.
I'f the SIPP disposes of the rear section then there does not have to any restrictions placed on the use of the property that aren't already there.
A SIPP can only be done with commercial property but in this instance they are selling the property. The freehold doesn't matter for SIPP purposes where the leasehold is disposed of and a price achieved.
Happy to discuss further.
Customer: replied 2 years ago.
Thank you for the reply... Just to be clear the SIPP company, Sanlam.", state that although the rear section is being sold off under a new separate lease to a new person, they are still the freeholder for the entire building and as far as they are concerned say that no residential use can be permitted for the rear section as they effectively "lease" that section (albeit on a 999 lease !) to the new leaseholder and that contravenes current SIPP legislation.
There were/are no restrictions on the building prior to it being a SIPP acquisition.
Sanlam state that they can only create a new lease which stipulates retail/commercial use for the rear section.
It seems baffling as it would no longer be held within the SIPP the only technicality being is that Sanlam are the freeholder for the entire building.
Expert:  JGM replied 2 years ago.
My understanding was that a 999 lease was treated as a sale rather than a lease. In other words it's the sale of the leasehold, not the grant of a lease as such as would be, for example, an assured tenancy.
Perhaps you should clarify this with the SIPP AS I agree with you, their stance is baffling.
JGM, Solicitor
Category: Property Law
Satisfied Customers: 10649
Experience: 30 years experience in property law.
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