Sunderland-based, financial services specialist, Northern Spire, has boosted client, Rise Elevator, from tenant to commercial property owner, thanks to a tax-efficient pension scheme.
Financial advisor at Northern Spire, John Longford, highlighted to business owner, Kris McGough, that he was in a position to invest in the property via a Small Self-Administered Scheme (SSAS) pension, meaning he has benefited from a £30,000 tax saving and the opportunity to receive tax-free rental income.
A SSAS pension is a defined contribution pension that an employer can establish for less than 12 members, to provide increased retirement benefits and greater investment flexibility, including the opportunity to invest in the company. Once the sale is complete, the property can then be let out to the company with tax-free rental income paid in to the pension scheme bank account.
Rise Elevator, located in the Team Valley Trading Estate, Gateshead, is an engineering company that provides commercial lift, installation and repair services to businesses across the UK including the NHS and the National Trust. In addition, it also engineers domestic lifts and specialist car lifts.
The company, which became a client of Northern Spire in 2019 when it was established, sought business protection, private medical insurance and investment advice.
Rise Elevator, which has five full-time employees, has recently gained the ISO 9001:2015 quality standard, as it continues to push for growth.
Northern Spire provides a wide range of financial services for clients looking to build, grow, protect or preserve wealth. It is a senior partner practice of St James’s Place Wealth Management.
John Longford, said: “There are many businesses that will be in a position to purchase existing office space but there is a huge lack of awareness that it is a viable option.
“I am pushing hard to get the knowledge out there and I would advise business owners to seek expert financial advice, to ensure they investigate all investment opportunities available to them. For those eligible, such as Rise Elevator, SSAS is extremely tax-efficient and the rent paid back in to the pension is tax-free, rather than dead money being paid out as an overhead.”
Kris McGough, said: “Like many business owners, especially those in the early stages, I had not even considered purchasing an office space. I really believe it is an important message that John is trying to establish within the business community, that it is important to be aware of all options available to you when it comes to personal and business investment, including purchasing commercial property via a SSAS pension.
“I would encourage everyone in business to make sure they are making their money work for them and thanks to a simple conversation with John, I estimate my tax saving, including VAT, to be around £30,000. Money that was previously rent payment is now being deposited in to my SSAS, meaning my pension is mounting significantly without any additional investment from myself.”
David Cook, managing partner at Northern Spire, said: “As advisors, we always look at ways we can add value for clients and, quite often, this comes in an area they have not considered themselves because they are unaware it is available to them.
“It takes an expert eye to spot investment opportunities and it takes the trust of a client to make a substantial and long-term commitment. There are so many potential avenues we can help people look down and the rewards for those that seek advice can be vast.
“Rise Elevator is just one company that we have helped in such a significant way. At the beginning of the year, we facilitated the purchase of the offices next door to our own and now our clients, CyberWhite, are our next-door neighbours. We always strive to go above and beyond and that is a reputation we are proud to be known for.”
