SIPP Commercial Property and Death Benefits
Written by Scott Jones, founder of CommercialPropertyKiln · Last updated
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What happens to commercial property in a SIPP when the member dies? Planning ahead avoids a forced sale and keeps options open for beneficiaries.
The property does not have to be sold
On death, the pension does not automatically have to sell the property. It can be retained within the pension and passed to beneficiaries through the scheme, who can take an income from the rent or draw benefits, subject to the scheme rules.
The 2027 IHT change
Note the coming change: from 6 April 2027, unused pension funds including SIPP-held property are expected to be brought into the estate for inheritance tax. This alters the estate-planning picture that made pensions attractive on death, so review it. See SIPP and the 2027 IHT change.
Practical planning
- Nominate beneficiaries clearly with the scheme, so the trustees know your wishes.
- Think about liquidity: if beneficiaries may want cash rather than a building, consider how that would be funded without a rushed sale.
- Co-owned property: where the property is jointly owned by several pensions, the agreement should say what happens on a member's death.
Take advice
Death benefits, drawdown and the 2027 change are complex and personal. Take regulated advice and keep your nominations up to date. See SIPP commercial property.
Does SIPP property have to be sold when the member dies?
No. The property can be retained within the pension and passed to beneficiaries through the scheme, who can take an income or draw benefits.
How does the 2027 IHT change affect death benefits?
From 6 April 2027 unused pension funds including SIPP-held property are expected to fall into the estate for IHT, so the estate-planning position needs reviewing.