Case Study

Michael has his own export company and personally owns the property from where he trades, which is currently valued at GBP500K.

With the recent recession Michael has fallen on hard times and is suffering cash flow problems in the short term.

Michael has approximately GBP100K in various pension funds and has decided to meet with his financial adviser to help generate ideas for his current situation.

His adviser proposes to Michael that he could transfer his pension funds into a SIPP and use his new plan to purchase a portion of the property back from Michael.

Michael’s SIPP now owns 20% of the property and he has released GBP100K from his property to help with his cash flow issue. The SIPP will receive a rent equal to 20% of the rental value.

Furthermore, Michael can buy back that 20% at some point in the future or he could move more of the property into his SIPP as and when he needs to.