Client Story: Entrepreneurs Boost their Business with a Pension Property Purchase
Here we share how an entrepreneurial couple transformed a derelict town hall into thriving business premises, using their pension fund.
CASE STUDY: Newburn Town Hall
Entrepreneurs David and Elaine Milbourne both ran separate businesses in different locations.
The businesses needed more space for growth and finding a place to situate both together would help reduce overhead costs.
Newburn Town Hall had been derelict for over five years. The building offered over 900sqm space that could provide both commercial and residential use.
We evaluated David and Elaine’s financial situation and discovered that using their pension fund would provide enough capital to not only purchase the building but also help restore its Grade II listed features.
Laurus Associates set up a Self-Invested Personal Pension (SIPP) to facilitate the purchase.
“With pension property purchases, individuals can buy business premises using their pensions, lease it back to the business and then use the quarterly rent paid to top up their pensions, which must be done using a SIPP. This allows investors to own commercial property in a tax efficient manner, as well as the ability to borrow up to 50% of the unencumbered pension fund, if necessary.” - Laurus Associates director Colin Dawson.
Newburn Town Hall is now home to Elaine Milbourne’s Performing Arts School, David’s marketing firm, Freshh Creative, and the Tapuccino Café.
The mixed-use property is now also home for David and Elaine with part of the building dedicated as a residential space.
Less than six months since re-opening the doors, David and Elaine Milbourne are beginning to reap the benefits.
“With over 420 metres squared commercial space, our businesses have greater scope for growth, which has helped us to forecast turnover increases of up to 15% for the coming year, which we are already starting to realise.
“Helping service the community has been the most rewarding part of the project for us, and Elaine has been able to introduce a wider prospectus of classes to her performing arts school including Adult Tap Dancing, Iyengar Yoga, Pilates, Arts and Crafts and Fitness classes. We also have plans to include a community choir, mobility classes and baby massage in the future.
“From a personal perspective, we now live in a beautiful, Grade II listed home that sits on the same site as our work ventures, and our businesses pay regular rent instalments back into our pension.”
- Freshh Creative director David Milbourne
Get in touch to discuss your financial options…
“As with any investment, there are benefits and risks which people must be aware of, especially if the property represents the main assets of the SIPP. Plus, with various costs involved in this investment type it is always best to seek expert financial advice.” - Laurus Associates director Karen Barwick.
Speak to Karen or Colin about what options are available to you with your pension fund or your business.
0191 281 1234
Photography by Chris Lishman