For use by professional advisers and for information purposes only


  • Three opticians own a business with two practice premises. John, the senior partner, is planning to retire after a recent bout of ill health. Clare and Paul, the other partners, would like to increase their share in the partnership.
  • Clare and Paul recognise that they will need to bring in a third Optician to work across the partnership’s high street and shopping centre locations.
  • John is keen to begin backing out of the partnership and sees solving the premises ownership issue as a first step towards retirement.


  • Their two practice premises are currently valued at £350,000 – on which there is borrowing of £150,000.
  • Senior partner John has a 50% share in the property, Clare has 30% and Paul has 20%
  • Clare and Paul want to have control between them but recognise they have to offer a stake to attract a good-quality optician. They decide to offer the new partner a 20% stake in the premises and restructure the partnership to keep 40% each.

The Solution

  • Clare and Paul transfer their existing pensions to two new SIPPs.
  • Clare has accumulated significant pension saving throughout the years, and has sufficient funds to allow her SIPP to purchase both her existing 30% stake as well as the additional 10% for a total sum of £140,000.
  • Paul has only £75,000 in his existing pension. However, he has the ability to make a lump-sum contribution. He makes a £32,000 contribution into his SIPP and @sipp claim his 20% basic rate tax relief, taking the fund to the £115,000. Paul then uses his SIPP to purchase a 30% stake (-10% from him, to pay off his share of the mortgage, as well as the additional 20%) for a total sum of £105,000.
  • A new junior partner is offered a 20% share of the business premises for £70,000. They can purchase this in cash or via a SIPP, depending on their personal circumstances.
  • John now has £100,000 in cash released from the premises, with the mortgage paid off, and negotiations can begin on buying his share of the partnership.
  • The premises are leased back to the opticians’ business at the market rental value (£28,200 pa) for a 15-year term, subject to rent reviews every five years.

Additional Benefits

  • They can reclaim higher and additional rate tax relief through self-assessment, where contributions have been made to fund a SIPP property purchase.
  • The premises now held in the SIPP fund will attract no Capital Gains Tax if they are sold.
  • The rent now accumulates in the SIPP fund, free of income tax, and is available for investment.
  • The rental income does not impact on their annual contribution limit, so they are also free to make contributions each year up to the annual allowance.

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