Land Acquisitions

For Use By Financial Advisors Only

This note is for general guidance only and is based on our understanding of the current position of the rules relating to land transactions. Specific advice should be sought in respect of each individual case to ensure that the requirements of HMRC and relevant legislation are being met.

Land Acquisitions Background

In addition to commercial property, land itself can form part of the assets within a pension scheme. There are various land types that Trustees can acquire, such as agricultural, forestry, or development land.

Care is needed to ensure any land investment generates returns for pension scheme members.

Land Acquisition Summary

  • Self-invested pension schemes can purchase land if there is a commercial aspect.
  • Trustees have a fiduciary duty to act in members’ best interests. Any land must have recognisable investment potential.
  • Various acquisitions are possible – agricultural for tenancy income, forestry for timber sales, development land for profit.
  • Issues arise if land lacks value, like a garden, or land adjacent to a trustee’s own property.
  • Existing buildings on land may also create issues.

Purchasing Land

The process of purchasing land is similar to acquiring commercial property in a pension scheme. The land is owned by the Trustees, who must obtain valuations, searches, environmental surveys, instruct solicitors, etc. Differences include specific insurance for the land type, especially public liability.

Agricultural Land & Forestry

Agricultural land is common in pension portfolios. Tenancies with farmers provide income through grazing or farming rights. Care is needed regarding any existing residential property, which would normally be excluded.

Forestry can also generate income through timber sales or licensing hunting/fishing rights.

Development Land

Land could be acquired for development by the scheme or for onward sale for profit. Strict criteria ensure pension scheme developments are commercially sound with clear benefits, like enhanced values and marketability.

Speculative land is held for future sale and capital gains. Trustees must show an active plan to research the market and confirm investment suitability.


Gardens can be residential, so understanding classifications is vital before acquisition. Even areas like orchards or grazing could fall under residential.

Trustees must act in members’ best interests. Land should be commercial, not to protect boundaries around a trustee’s home, for example.

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