3 replies to this topic

[ealdous]

Just thought I'd ask your opinions/advice...

We've found a field of 22 acres, the plan is to buy 17 acres through our SIPPs and rent it to ourselves.
Then buy the remaining 5 acres ourselves from our savings.

So the question is: Should buy the five acres as individuals, or should we put the cash into our Ltd company (which has been set up to cover all future farming enterprises, but is currently dormant) and buy it through the company.

We would be looking to try and follow the Field to Farm plan and build on the five acres as the SIPP can't hold residential property.

Any thoughts on pro and cons to either option would be welcomed.

Thanks

Emma

[ShaunP]

I am not an accountant but my first thought would be to hold the 5 acres personally if you are planning to make it your home as it would then be exempt capital gains tax.

Does your SIPP have sufficient cash to buy the land outright as it can be very hard to get a loan on land in a sipp. You may have to enter into a formal rental agreement for the land.

I am not sure why you would put the enterprise into a Ltd company if you are just starting out and following the F2F route. If you start making a loss that would be offset against any other income you may have and can be reclaimed. I think in a company you can only offset against future profits and you lose them after a certain time.

Just some thoughts that may help......or not!!!

ShaunP

[Cornish Gems]

Very well put Shaun, buy personally and if you wish to set the enterprise up as a Ltd company rent it to them, which is how we have structured our enterprise.

[ealdous]

Thank you both, I was leaning towards buying for ourselves so it's good to have some positive feedback.

The Sipp has enough in to buy its share, so thankfully we won't need to borrow to buy.
We originally set up the Ltd company so we had the option to put our pension funds into either an SSAS company pension or two SIPPs.
The SIPPs turned out to be the better way forward and for now Ltd co is dormant, but it might come in useful one day.

Now we are just fingers crossed while we wait to hear if our offer is accepted... then on with the next challenge!