But how has the SIPPS sector reacted to this change and what will it mean for providers over the next 12 to 18 months? Notwithstanding these uncertainties, we have seen a relatively constant stream of activity in the market place over recent months amongst our SIPP provider clients.
Our dedicated Property in Pensions team (one of the largest in the UK within a law firm) has handled a significant volume of purchase, sale and management transactions across the UK over recent months and this does not show any signs of slowing down. Handling so many cases on behalf of providers allows us valuable insight into the current SIPP commercial real estate market and market trends.
Despite the current issues regarding in specie contributions and in specie transfers in Scotland, the volume of activity appears to be holding up well. Whether or not pension planning and SIPP structuring is and will remain ‘economy and Brexit proof’ is not entirely clear, but the sector remains resilient. From offices to light industrial units, public houses to retail properties and hotels either on a connected or unconnected tenant basis, we are encountering as wide a variety of SIPP property as ever.
The current in specie transfer of property and Land and Buildings Transaction Tax (LBTT) position in Scotland has, as one might expect, had an impact upon the numbers of those types of transfer transactions. We are working with stakeholders to reconcile the differing positions with Revenue Scotland, however any deficit in transactional activity resulting from this freeze/slow down, has been made up by other transactional SIPP dealings.
When the volume of activity is high this undoubtedly requires all professionals working within the transactions to be on side. The business partners/professionals assisting providers can add a great deal of value to each transaction if they all work together. Regular interaction, meetings and update sessions between solicitors, surveyors, insurers and the providers promotes the delivery of a much slicker service.
There is no doubt that the sharing of market information and expertise allows for a deeper understanding of activity, attitudes and future strategic prospects in the sector. As experience, expertise and market knowledge grows within provider team professionals, the streamlining of processes is in turn achieved to the benefit of everyone involved. Clarity on process along with clarity on cost has real value.
Whilst the political and economic landscapes may be uncertain, the SIPP market has so far proven itself to be vibrant and varied, in a way which differs markedly from the mainstream commercial and commercial investment property market. Long may this continue.