Commercial property in a SIPP: An end-to-end process showing how it actually works

This article is intended for financial services professionals only. None of the information contained in this article should be received as advice. Pensions are a complicated area of financial planning and IPM suggests that financial advice from a suitably regulated financial adviser is sought before an individual takes any action in respect of their pension savings.

Commercial property purchase within a SIPP is an area of strength for IPM.

As of September 2026, we own over 1,300 properties on behalf of our clients.
We currently have over 100 transactions in progress.
Almost 60% of the new SIPPs we established in 2025 involved property purchases or transfers.
Despite concerns around how the introduction of IHT will impact commercial property SIPPs from 2027, we continue to receive a high level of enquiries from financial advisers about this type of work.

You may have previously read some of our content relating to SIPPs and property purchases, including:

When an adviser receives an enquiry to purchase a property in a SIPP, often the property itself becomes the main focus. And that’s understandable, given the nature of the investment and the various scenarios this can throw up.

But it is still important to remember the SIPP in all this. For advisers, you still need to assess the type of pension that is most suitable for your client’s needs. Once this has been established, you need to undertake due diligence and select a provider to work with, and then think about the usual things you would consider with a pension switch, all with this large investment looming in the background.

We are conscious that we have previously looked at how you set up a SIPP with IPM or things you need to consider when purchasing a property through a SIPP. We thought that for this article it would be useful to combine the two.

The initial enquiry – is it feasible?

This is a bit of a sense test as to whether a SIPP property purchase enquiry is worth too much of an adviser’s time. Things to consider here can include:

Is the property commercial? In the Pensions Tax Manual, residential property owned by a SIPP is liable to a tax charge, so SIPP providers will not entertain this.
Does the client have, or can they contribute, sufficient monies into a SIPP to facilitate the purchase?
Does the purchase of a property fit in the broader strategy for the client? For example, was the client planning on drawing benefits from the SIPP, but now they are asking you to invest a large portion of the SIPP’s value in an illiquid asset. Is a property purchase the right thing to do?

Speak with your provider

If the basics stack up, your next stop would be to find a SIPP provider to work with.

Naturally, we would hope you would turn to IPM in the first instance! We would issue you with our property enquiry form and help you run through the enquiry. This can include the number of SIPPs involved in the transaction and any funding considerations, including borrowing and if the property is VAT-registered.

The provider can also look at the property in more detail: is there anything that jumps out that may cause them concern? This could be whether the building has part residential usage, a split title, access concerns, or whether there is an issue regarding marketability for any future sale.

At IPM, we are happy to provide as much support as we can at this point and give you an opinion in principle. However, until such time as the SIPP has been established and funded, we cannot offer any guarantees that a purchase will be acceptable to us.

The recommendation process

If, after speaking with your chosen provider, they are happy to move forward, it’s then time for an adviser to go through the usual process you would for any other pension switch.

As we spoke about earlier, advisers can easily get caught up in the fact that the client is buying a property through a SIPP. Put this aside for now and go back to what would usually be done to move pension benefits from one provider to another; it’s just in this instance a bespoke SIPP will be required to facilitate the investment choice.

Speak with the vendor / agents

At the same time as going through the recommendation, it’s worth getting the client to speak with the agent or vendor to make them aware that the purchase is being made through a SIPP. Usually, once a purchase price has been agreed, agents are pushing for heads of terms to be issued and asking for the purchasing solicitors’ details.

Where the purchase is from a connected party, this will not be so much of an issue. However, if the purchase is from an unconnected third party, this time can be used to reassure all parties that matters are progressing, but there are some things the client needs to get in line in the background first, which leads us nicely to…

Set up the SIPP

Until the SIPP is set up, there is no legal structure in place that will acquire the property. So, understanding not only what a provider will require to have the SIPP established, but also what they will require to instruct solicitors will be an important consideration.

If the vendor is laid-back, then this will make matters easier. However, we often see pressure being put on the client to make progress with the purchase. Can the SIPP be set up with electronic signatures? Are any original documents required? What are the provider’s AML requirements?

At IPM, the paperwork to set up a SIPP can be completed online, and we can usually have the SIPP created within 24 hours of receipt.

Think about the funding

This area requires some thought from advisers during the recommendation process. By the time you’re at this point, we’ve ascertained that the purchase is something your chosen provider is happy to move forward with. However, there are several variables here:

Does your provider require a minimum amount in the SIPP to instruct solicitors? It is not uncommon for a provider not to issue instructions until there is money in a SIPP. Without solicitor instructions, no formal progress on a purchase can take place, which is usually what vendors want to see. At IPM, we require a minimum of £1,500 per SIPP in the trustee bank account to issue instructions.
Are transfers being made? If so, what is required to facilitate the transfer? Are both pension providers on Origo? Does timing of the transfer need to be considered as part of the property purchase? You don’t want to get into a situation where all parties are ready to exchange, but the SIPP provider won’t commit as there are insufficient monies in the trustee bank account.
MoneyHelper appointments for pension transfers – as we have previously looked at, transfers to bespoke SIPP arrangements such as IPM’s can be “amber flagged” by a transferring scheme. This will require a client to undertake a MoneyHelper appointment, which can take some weeks to arrange. Without this, a ceding scheme will not proceed with a transfer.
Is borrowing required? Clients can borrow up to 50% of the SIPP’s value under HMRC guidelines. By the time we get to the point of instructing solicitors, clients should have sourced the loan and agreed terms with the lender. The SIPP provider will then take things from here, but as with any other property transaction, putting another party into the mix (e.g., a bank) can lead to the purchase taking longer.
Is the property VAT-registered? VAT-registered properties are often something we deal with. You can find out what this means for a potential property purchase here.

Manage expectations

Property transactions can be stressful and emotional. This is not like your normal SIPP investment! There is a perception that buying a property through a SIPP can add layers of complexity. While it is true there are extra steps to consider, following some of the steps we’ve outlined above will help advisers navigate these.

With that said, after solicitors have been instructed, a SIPP property purchase should be viewed as any other transaction; solicitors will go back and forth for a period of time until all parties are in agreement and documents are ready to be signed. Explaining this to clients and vendors early in the process can be beneficial.

The property has completed – now what?

You may well get to completion, have a happy client, and think that’s that! But to an extent, that’s simply part one of the client’s SIPP sorted.

Are there residual funds in the SIPP after the purchase?
What are you planning on doing with the rental income?
Are we expecting any VAT back on the purchase price?

With a bespoke SIPP like IPM’s, our advisers set up an investment solution alongside the property within the SIPP to invest any additional money there may be. This is something IPM does not charge extra for.

IPM also does not operate panels of investment houses you must select from for your client, meaning we likely can work with your preferred platform, DFM, cash management solution, bond provider, or broker. You can read here about the structures of some of the SIPPs we look after, including ones with commercial property.

We’re here to support advisers

Email info@ipm-pensions.co.uk or call 01438 747151 to learn more about working with our specialist team.