XYZ Engineering Ltd is a successful engineering company owned by Will and Jim, who also personally owned its premises and each had a number of old pension schemes. XYZ had recently received an unusually large order and needed to replace some plant.


  • XYZ needed to raise funds to finance the delivery of the order and also to acquire additional plant
  • XYZ did not like its bank’s lending terms and requirements for increased security from personal assets
  • Will and Jim were both disenchanted with the poor investment performance of their pension plans and the hassle of keeping track of them
  • Will and Jim were interested in protecting their business premises from their creditors
  • Both Directors were concerned about lack of ongoing pension contributions

What we did

  • Transferred Will and Jim’s pensions into two individually owned and controlled Self-Invested Personal Pensions (SIPPs)
  • Borrowed 50% of value of SIPP funds as a commercial mortgage
  • Used SIPP funds to purchase business premises from themselves
  • XYZ leased business premises from Will and Jim’s SIPPs, paying a commercial rent into their pension pots
  • Used proceeds from sale of property to make directors’ loans to XYZ

The results

  • Business received funds to purchase plant and fulfill order
  • Pension affairs were simplified
  • Control of pensions was gained within SIPPs
  • Property became a pension asset, so potentially secure from XYZ’s creditors
  • Bank borrowing was restricted to a commercial mortgage with personal covenants
  • Will and Jim’s pensions received future funding by way of rent from XYZ
  • Realised value of property at a time when capital gains were minimal, minimising Will and Jim’s capital gains tax bills
  • No capital gains tax on future growth in value of property