There are two options when it comes to selling a commercial property from the pension.

Clients can sell the property to a third party, and they may choose to instruct a local estate agent to market this on behalf of the pension.

In much the same way as a residential house purchase, agents will charge fees for acting in the sale, and the clients will agree an asking price for the property with the agent.

It is important that the provider is included in these conversations, however, to ensure that both provider and HMRC requirements are complied with. 

Some providers also allow clients to sell commercial property via auction, in some cases this can lead to lower sale values. However, one of the benefits of an auction sale is that any successful buyer must exchange contracts to proceed with the purchase within a defined period, usually 30 days.

The buyer will pay a deposit, typically 10 per cent of the sale price, and will be contractually and legally obliged to complete on the purchase.

The ability to realise a return on a commercial property investment is underpinned by robust due diligence when identifying a property to acquire.

It is of course worth remembering that commercial property values can go down as well as up, and the commercial property market can be affected by economic, political and social conditions.

Fundamentally, investment in commercial property allows the opportunity to grow a client’s pension in a tax advantageous environment.

However, the ability to grow pension wealth is underpinned by identifying a suitable property, appropriate due diligence being undertaken on the property and potential tenancies, compliance with the regulations and selling the property at the right time.

Caitlin Southall is pension technical manager at Curtis Banks