Stuart and Katy have both worked for a large national firm of surveyors since leaving university twenty years ago. They have enough contacts to set up their own practice and feel they are at the stage where it is now or never.

They have sufficient working capital from their personal assets and a small bank loan to establish the business over the first twelve months. To start with, they rent a property on a short-term basis, which cost them £20,000pa over a full year. The property is not ideal and they would like to purchase their own commercial premises within the next five years but have insufficient capital at this stage.

The partner who is dealing with their business at the accountancy practice establishes that they have £250,000 pension benefits built up from their previous employment and asks them to see the firm's pension specialist.

Stuart and Katy expect the pension specialist to advise them either to keep their pension benefits with their former employer's pension scheme or move them to a personal pension to try and obtain larger pension benefits when they become eligible to take them.

After looking at all the circumstances, the pension adviser recommends they both set up a Montpelier SIPP and transfer their occupational pensions in. He says they will be able to use the full amount to purchase office premises and then lease it back to their business.

They mention that they know of an agricultural building with planning permission for offices that would cost £225,000. The problem is that the refurbishment costs are £75,000 and they do not have sufficient funds within their pension.

The adviser tells them that their SIPPs can borrow up to 50% of their net asset value so the borrowing could be as much as £125,000.They will have to meet all of the purchase costs from their SIPP assets and the borrowing.

He also tells them that the transaction must be completed on fully independent commercial terms and a lease set up between the partnership and the SIPPs to pay rent. The rental payments are offset against any profit they make and help to reduce their tax bill. A further benefit is part of the rental will be used to pay the mortgage but the excess will go into their pension funds and grow potentially free of tax.

Stuart and Katy decide that they would like to establish two SIPPs borrow £50,000 and set up their business in more appropriate premises