Key Benefits

• Invest in your company tax efficiently using your own pension scheme
  
  
• Use your pension scheme as a source of capital through loans (within strict limits)
  
  
• Costs per member can be a cheaper alternative to using individual SIPPs

  Plus of course, you will receive all the benefits of a pension
  

A SSAS is registered with HMRC and enjoys tax-exempt status, all investments made will be free of Capital Gains Tax, and contributions to the SSAS will receive tax-relief. Basic rate tax relief can be claimed by the SSAS itself, and any higher rate tax would be claimed through the member's tax return.

The sponsoring employer can also pay contributions to the scheme and obtain tax relief on the contributions.
And, at retirement, members of the scheme can take 25% as tax free cash and pay an income.

1. Investing in your company tax efficiently using a SSAS

The big attraction of pension planning with a SSAS is the ability to use it as a tax efficient way to invest in your company and build a substantial retirement fund at the same time.
The biggest thing you can do is to buy the premises of the company from where it is trading.

First you create your SSAS fund and the commercial property is bought as an investment of the Scheme, using the initial contributions from the Directors. This means

a) You reduce the company's corporation tax bill

b) Rent is paid by the company to the pension scheme and attracts corporation tax relief

c) No income tax is paid by the pension scheme on rent received

d) There is no capital gains tax to pay if the property is sold by the pension scheme

2. Releasing capital from the pension scheme to the company

As well as building up substantial retirement funds, the directors can release some of the capital back into the company by making a loan-back from the SSAS fund.

Locking up funds, which might be needed for the business has put many directors of small businesses off investing in pensions. With a SSAS it is possible to use a loan back from the funds in the SSAS pension scheme.

Loans can be made for a range of commercial purposes, including purchase of fixed assets, however are under strict rules; restricted to 50% of the net SSAS fund, on a repayment basis of no more than five years and with a first legal charge on property

Borrowing to Invest

Trustees of the SSAS may also borrow money from lenders to enable them to purchase particular assets.

3. Better value than a SIPP for a group of Directors

SSASs are suited to any group of individuals who run a business and want to have complete control over the pension fund. The costs per member are usually lower than using individual SIPPs to pool funds to purchase commercial property. SIPPs do not have the facility to loan funds to associated or un-associated employers. There is no requirement for a professional to be appointed to the scheme, although this may be desireable!

And, because the members of the SSAS pension scheme are deemed to be investing the funds for themselves, provided the members of the SSAS are also trustees, there is a lesser regulatory requirement than if all members were not trustees.

Get in touch if you'd like to know more or discuss all tax planning options open to directors

Or click here to learn more about setting up and running a SSAS