Pension Property

[dangerhere]

I know this has been asked about on numerous occasions. I have 300k in a pension bond. I would like to purchase a house for 315k but would like to release about 100k from my fund to do so. Assuming this is ok what is the position when the property is fully paid for at the end of the loan. can I sell it and get the value into my hand or must it remain in the fund not allowing me to pass it on to someone else.

 

[LDFerguson]

If your existing pension fund doesn't already have self-directed options, you can transfer to one that does, or set up a self-administered scheme if appropriate and then your pension fund buys the property as you suggest.

You do not own the property, in full or in part. Your pension fund does. Your pension fund must arrange the borrowing. It must be on an annuity basis with a term no greater than 15 years.

By extension, when the time comes YOU don't sell the property; your pension fund does and the proceeds go back into the fund.

The only way for you to access any cash from the pension fund is to retire which is subject to the usual rules.

When you retire it is possible to transfer the property from a pre-retirement pension vehicle into an Approved Retirement Fund, subject to ARF rules. An ARF can be passed to your estate, if that's what you mean by "passing it on to someone else."

Liam D. Ferguson
www.ferga.com