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One of the key features of ITC self-administered pensions is the ability to invest in property, be it residential or commercial. Some of the main benefits are that there is no Capital Gains Tax payable on property growth and no income tax on rental income from the property. Also, If required, your pension has the ability to borrow to purchase a property within certain parameters.

There is also the ability for two or more pension investors to combine their funds to purchase property with or without lending. It can enable pension investors to come together to invest in pension assets that they may not otherwise be able to afford. In simple terms it allows people to join their resources.

Examples of this would be spouses, family groups and business associates. There is great flexibility and parties can invest in any share splits e.g., 20:40:40, but it can be any combination - it really doesn't matter which is what makes it so flexible.

The investment splits can also change over time and are based on investment/divestment from the trust by each investor. For example, John and Mary go in today and buy a property for €200,000, 50% each or €100,000. In a year’s time they decide they should renovate the property which will result in an increase to the rental income. Mary doesn’t have any available funds in her pension scheme, but John does so they agree to move forward with John putting the funds in. John will now have more units than Mary does in the Trust. Say John puts in an extra €50,000, then he'll have €50,000 of extra units based on the unit price at the time.

Similarly, if one unitholder needs funds for the likes of an ARF drawdown, it is possible for one or all unitholders to withdraw funds and their unitholdings will adjust accordingly.

Another advantage of this structure is it can facilitate easy entry and exit. The people who start this arrangement can be completely different to those who finish it, whether on the transfer of assets under death or new investments from other pension investors known to them. These changes can all be tracked through our ITC Client Portal and App.

Combining resources from a number pension schemes can facilitate efficient retirement planning, financial planning and increase the available asset pool, with or without lending.

For further information, please speak to your financial advisor or email JustAsk@itcgroup.ie

Steven Garavan, ITC Business Development Manager