SSAS and Stamp Duty

Good News for SSAS in the Budget with the Zero Rate Band on Commercial Stamp Duty.

In the recent March 2016 Budget, the Chancellor announced that there will be a change in the way that stamp duty on commercial property is calculated. From 17th March, the system will move from one where the stamp duty rates apply to the whole transaction value to one where different rates will apply to the value over each tax band, which is good news for SSAS – small self administered schemes..

The new rates and tax bands will be 0% for the portion of the transaction value up to £150,000; 2% between £150,001 and £250,000, and 5% above £250,000.

The Government estimates that buyers of commercial property worth up to £1.05 million will pay less in stamp duty.

Why is this good news for SSAS and SIPPS?

These changes to commercial property stamp duty will benefit people who intend to buy commercial  property in SSAS and SIPPS, as the amount of stamp duty paid will fall. For example, under the old regime of 3% for the whole transaction, a property valued at £260,000 would pay £7,800 in stamp duty, whereas under the new regime, stamp duty will fall to £2,500.

Bearing in mind that the lack of stability in the stock market right now is making it a less attractive investment vehicle, it is likely that the commercial property stamp duty change will see an increase in interest within SSAS and SIPPs. This is because investors tend to like the fact that property is a physical asset and the reduction in stamp duty will mean it is more affordable for those wanting to invest in it at a time when contributions are being increasingly limited by the tightening of annual allowances and lifetime allowances.

Don’t forget that rental income is not classed as new contributions to a Pension Scheme and falls outside the Annual Allowance.

Contact Us. We are specialists in SSAS

At PML, we are specialists in SSAS, especially when setting them up for directors of small businesses. If you would like to find out more about SSAS, please contact us or call us on 0121 693 0690.


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