SSASs and why they are a great planning vehicle for business owners

16 July 2018

What is a SSAS?

A SSAS is a small self-administered pension scheme and has the ability to pool together your pension savings to purchase investment assets you would otherwise not be able to acquire individually. This can help meet your needs as a business owner wishing to set up a pension arrangement for a small group of co-directors and key employees. A SSAS offers businesses a wide range of potential investments including stocks and shares, unit trusts, investment trusts, open-ended investment companies (OEICs), deposit accounts, loan backs and commercial property, providing greater flexibility and investment control over your pension arrangements. The ability to purchase commercial property from any party, renting it to the business and lending money from the SSAS to the business, are very popular features of a SSAS and used by many of our clients.

A SSAS also offers favourable tax benefits:

  • Company contributions qualify for Corporation Tax Relief
  • Contributions by members are free from Income Tax
  • Investment growth is free from Income Tax and Capital Gains Tax
  • A tax-free pension commencement lump sum of 25% of a member’s fund can be taken from age 55
  • Lump sum death benefits are free from Inheritance Tax

There are many SSASs in existence and, sadly, there has been an increasing number of schemes available where the trustees are unhappy with their current SSAS provider for various reasons including costs and services.

If you have found yourself in this position, the good news is that there is no need to break-up these schemes, and you can instead look to appoint new professionals to run it.

Over the past 2 years, the number of schemes run by Old Mill has increased by over 20% and many of these have come from SSAS schemes already in place.

There has also been a number of changes to pension legislation over the past few years. To avoid tax penalties it is essential that registered pension schemes comply with the new regulations and reporting requirements. Old Mill can assist you and ensure that your pension complies with the updated legislation no matter how complex your scheme is. We will give you all the information you need to make informed decisions and make certain that the administration runs smoothly.

Old Mill act as scheme practitioner and can deal with the responsibilities of a scheme administrator on your behalf. The scheme administrator has a highly responsible role and protects the member trustees from falling foul of making unauthorised payments or breaching tax regulations which would result in potential penal tax charges.

Should you wish to discuss your existing SSAS or would like to find out more about SSASs and arrange a free, no obligation meeting with a pensions manager, please speak to your usual Old Mill contact and a pensions manager would be happy to discuss your individual circumstances.

 

  • For further information please contact:

    Steve Woodham

    Private Client, Pensions, Yeovil

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