Property Syndicates
Property
Syndication is where a number of SIPP scheme holders club
together to invest in a bigger property, often a group of
business partners or directors buying their own premises.
This makes them particularly attractive to business owners
(including professional partnerships) where the pension
fund will benefit from both the rental income and the property's
capital growth. You don’t have to run a business to
benefit from a Property SIPP, there is an increase in the
number of Syndicates of "unconnected parties",
often brought together by an IFA who takes an annual fee
for managing the Syndicate on an ongoing basis. We have
excellent contacts with solicitors who are specialists in
drawing up Syndicate Agreements and we have agreed a template
with them. Typically, the "Exit Plan" for Syndicate
members is the most important aspect of the Agreement. This
needs to be agreed by all members in advance, otherwise
relationships can become damaged, if it has not been considered.
Under the Finance Act 2004, the amount that can be borrowed
under a SIPP is going to change from 6th April 2006. Currently
you can borrow up to 75% of the property value.
This changes from the 6th of April 2006 to 50% of
the Fund - a significant reduction in gearing.
We believe that this will increase the need for Syndicates.
One of the major advantages of Syndication is it allows
the member SIPPS to invest in larger properties with better
tenants, covenants and returns.
MW Pensions Limited will be delighted to consider your own
property purchase proposal and will normally be able to
confirm immediately whether it would be permitted by the
Inland Revenue.
We have a number of Property Syndicate leaflets.
