There are several ways you can use the scheme. One of the most popular is to purchase commercial property for the business either outright or partially using your pension cash. You could also loan the company some money on commercial terms. And the third main option is to purchase shares in the company.

Can I buy a shop with my pension?

Permitted investments include business premises, factories, shops, offices etc. Residential property is not permitted. It is also possible for several people, such as business owners or family members, to pool their pension funds together to purchase property.

How can I use my pension to buy a house?

You can’t hold a buy-to-let property through your pension because it is classed as residential property, but you could pull your money out of your pension and use it to purchase one. In this scenario, you would be hit with an income tax bill on the money you withdrew (see above).

Why is pension important for a business?

Pension contributions can be a tax-efficient way to take money from your business. If you are planning to sell your business to fund your retirement, making the most of pension allowances is wise because they can help reduce Capital Gains Tax when your company is sold.

Can I use my personal pension to buy property?

In most cases you can take money from your private pension to buy a property. This is because from the age of 55 you can generally take as much or as little money as you like from a private pension.

What can you do with spare cash limited company?

Explore our overview of the options available to you – including how to invest money – if you have a cash surplus built up in your company.

1. Do nothing.
2. Use high-interest accounts/bonds.
3. Take a loan from the company.
4. Distribute the funds as dividends.
5. Make company pension contributions.
6. Invest in stocks and shares.

Can I draw my pension early?

Most personal pensions set an age when you can start taking money from them. It’s not normally before 55. You can take up to 25% of the money built up in your pension as a tax-free lump sum. You’ll then have 6 months to start taking the remaining 75%, which you’ll usually pay tax on.

Why is pension so important?

Pensions have many important advantages that will make your savings grow quicker. A pension is basically a long-term savings plan with tax relief. Getting tax relief on pensions means some of your money that would have gone to the government as tax goes into your pension instead.

Can you leave money in a limited company?

When a limited company is incorporated at Companies House, it becomes a legal entity in its own right. This means the assets and profits belong to the company rather than the owners or shareholders. So, you are not able to take money out of the business in the same way that a sole trader can.