What is a SSAS pension?

A Small Self-Administered Scheme (SSAS) is an occupational pension scheme established by a limited company for the benefit of its director or directors. Unlike a personal pension, the SSAS is controlled directly by its members as trustees, giving them full oversight of how the fund is invested. Company pension contributions qualify for Corporation Tax relief, and growth within the fund is free of Income Tax and Capital Gains Tax.

What is a Family Investment Company (FIC)?

A Family Investment Company (FIC) is a private limited company established to hold and grow family wealth in a tax-efficient structure. By issuing different classes of shares to family members, the founder can control who benefits economically while retaining voting control. A FIC is widely used alongside a SSAS as part of the Lifetime Business Tax Plan.

What is the Lifetime Business Tax Plan?

The Lifetime Business Tax Plan (LBTP) is an integrated tax planning framework developed by TLPI that combines a SSAS pension and a Family Investment Company into a single coordinated strategy. The SSAS reduces Corporation Tax and grows pension assets tax-free. The FIC receives surplus cash and builds long-term family wealth in a structure that reduces Inheritance Tax.

What is Business Property Relief?

Business Property Relief (BPR) is a relief from Inheritance Tax available on certain business assets, including shares in trading companies. Qualifying assets can attract 100% or 50% relief. From 6 April 2026, the 100% rate is capped at £1 million per person per estate — above that, the relief drops to 50%. BPR is only available on genuine trading businesses; investment companies do not qualify.

What is a SSAS loanback?

A loanback is where the SSAS lends money to its sponsoring employer. HMRC permits this within strict rules: the loan must not exceed 50% of the scheme net asset value; it must be secured by a first legal charge over an asset of at least equal value; it must carry interest at least 1% above the Bank of England base rate; and it must be repaid within five years.

What is the Money Purchase Annual Allowance (MPAA)?

The Money Purchase Annual Allowance (MPAA) is a reduced annual allowance of £10,000 that applies once a member has flexibly accessed their pension savings. It does not apply if only a tax-free cash lump sum has been taken. If the MPAA applies, pension contributions above £10,000 per year will not receive tax relief.

What is the surplus cash trap?

The surplus cash trap occurs when a trading company accumulates cash or investments beyond the level needed for its day-to-day operations. HMRC may treat this surplus as excepted assets, which reduces or eliminates the Business Property Relief available on the company value. Directors who allow cash to build up risk a larger Inheritance Tax bill on death.

What is the difference between a SSAS and a SIPP?

A SSAS is an occupational scheme tied to a specific employer, while a SIPP is a personal arrangement. A SSAS can lend money to the sponsoring employer — a SIPP cannot. A SSAS is collectively managed by members as trustees, giving directors direct control. For company directors who want to combine pension saving with business finance, a SSAS is generally the more appropriate structure.

What is Corporation Tax and how does a SSAS reduce it?

Corporation Tax is the tax paid by UK limited companies on their taxable profits. Employer pension contributions made to a SSAS are a deductible business expense, which reduces the company taxable profit and therefore its Corporation Tax bill. A company paying Corporation Tax at 25% saves £25,000 for every £100,000 contributed to its SSAS.

What is Inheritance Tax and how do directors reduce it?

Inheritance Tax (IHT) is charged at 40% on the value of an estate above the nil-rate band of £325,000. For company directors, reducing IHT exposure typically involves a combination of SSAS pension nominations, gifting shares in a Family Investment Company, claiming Business Property Relief on trading business assets, and using the annual gift exemption.

SSAS, FIC and tax planning glossary

Small Self-Administered Scheme (SSAS): A Small Self-Administered Scheme (SSAS) is an occupational pension scheme established by a limited company for the benefit of its director or directors. Unlike a personal pension, the SSAS is controlled directly by its members as trustees — giving them full oversight of how the fund is invested. Company pension contributions qualify for Corporation Tax relief, and growth within the fund is free of Income Tax and Capital Gains Tax. A SSAS can hold commercial property, make loans back to the sponsoring company, and invest across a wide range of assets.
Occupational pension scheme: An occupational pension scheme is a pension scheme established by an employer or employers to provide benefits to, or in respect of, their employees. A SSAS is a type of occupational pension scheme. Because it is tied to the sponsoring employer, membership is limited to employees and directors of that company, unlike personal pensions which are available to any individual.
Sponsoring employer: The sponsoring employer is the limited company that establishes the SSAS. The company makes pension contributions into the scheme on behalf of its directors and is the entity that benefits from Corporation Tax relief on those contributions. The SSAS cannot exist without a sponsoring employer.
Sponsoring company: The sponsoring company is the company connected to the director or directors who set up the SSAS. It is the same entity as the sponsoring employer and is responsible for making contributions and meeting the scheme's obligations.
Member: A member of a SSAS is an individual who is an active, pensioner, deferred member, or pension credit member of the scheme. Members are typically directors or employees of the sponsoring employer. A SSAS can have up to 11 members. Family members of the director may also be members of the SSAS, even if they are not employed by the sponsoring company.
Member trustee: Member trustees are members of the SSAS who also hold trustee responsibilities. All members of a SSAS are typically required to be trustees. Trustees are jointly responsible to HMRC and The Pensions Regulator for ensuring the scheme complies with pensions legislation. Their decisions must be made in the best interests of the scheme members, not the business.
Corporate trustee: A corporate trustee is a professional company appointed alongside the member trustees to ensure the scheme adheres to HMRC rules and pensions regulation. The corporate trustee is a co-signatory on scheme assets and can prevent investments or actions that would breach the rules or damage the scheme. TLPI acts as corporate trustee for SSAS schemes it administers.
Professional trustee: A professional trustee is an individual or company appointed in a formal trustee capacity to support the governance of the SSAS. Their role is to ensure compliance, provide expertise, and act as a safeguard against decisions that could trigger tax penalties or regulatory action. TLPI provides professional trusteeship as part of its SSAS administration service.
SSAS Administrator: Every SSAS must have a registered scheme administrator. The SSAS Administrator is a formal role, accountable to HMRC for filing pension scheme returns, reporting events, and ensuring the scheme operates within the rules. TLPI acts as scheme administrator for the SSAS schemes it manages, taking on the regulatory responsibilities on behalf of directors.
SSAS Practitioner: A SSAS Practitioner is an advisory role that supports the establishment and ongoing management of a SSAS scheme. The practitioner provides guidance on investment decisions, loanbacks, and regulatory requirements, but does not hold the formal regulatory accountability of the scheme administrator. TLPI operates as both practitioner and administrator for its clients.
Connected party: A connected party, in the context of a SSAS, is any person or entity that has a relationship with the scheme members, their family, or companies they control. SSAS rules impose restrictions on transactions with connected parties — for example, a SSAS cannot lend money to a member personally or to a company owned by a member's family. Understanding connected party rules is essential to avoiding unauthorised payment charges.
Employer-related investment: An employer-related investment is any investment made by the SSAS in shares, property, or other assets of the sponsoring employer or a company connected to it. HMRC rules cap employer-related investments at 5% of the SSAS's net asset value. Exceeding this limit constitutes a breach that can trigger tax penalties. TLPI monitors this as part of its ongoing administration service.
Unauthorised payment: An unauthorised payment is any payment made by a SSAS that falls outside the permitted categories under HMRC rules — for example, a loanback that exceeds 50% of net assets, or a benefit taken before the minimum pension age. Unauthorised payments trigger a tax surcharge of up to 40% on the member and up to 15% on the scheme itself. Avoiding unauthorised payments requires careful planning and proper scheme administration.
Corporation Tax: Corporation Tax is the tax paid by UK limited companies on their taxable profits. Employer pension contributions made to a SSAS are a deductible business expense, which reduces the company's taxable profit and therefore its Corporation Tax bill. A company paying Corporation Tax at 25% saves £25,000 for every £100,000 contributed to its SSAS. The ability to reduce Corporation Tax is one of the primary reasons directors choose a SSAS. See TLPI's Corporation Tax planning page for more.
Annual allowance: The annual allowance is the maximum amount that can be contributed to a pension scheme in a tax year while still qualifying for tax relief. The standard annual allowance is £60,000 (as of 2024/25), but this includes both employer and employee contributions. Carrying forward unused allowances from the previous three tax years is permitted, subject to conditions. The annual allowance is reduced to the Money Purchase Annual Allowance if you have flexibly accessed pension funds.
Money Purchase Annual Allowance (MPAA): The Money Purchase Annual Allowance (MPAA) is a reduced annual allowance of £10,000 that applies once a member has flexibly accessed their pension savings — for example, by drawing income from a flexi-access drawdown arrangement. It does not apply if only a tax-free cash lump sum has been taken. If the MPAA applies, pension contributions above £10,000 per year will not receive tax relief, making it important to plan carefully before accessing pension funds.
In specie contribution: An in specie contribution is the process of transferring an asset — such as a commercial property — directly into the SSAS without first converting it to cash. This avoids the costs and delays of a sale and repurchase. The asset must be transferred at open market value, and the usual contribution rules and tax relief apply. In specie contributions are commonly used when a director wishes to contribute a commercial property they personally own into their SSAS.
In specie transfer: An in specie transfer is the movement of an asset directly from one pension scheme or arrangement into a SSAS, without liquidating it first. Unlike an in specie contribution (which involves the director's own assets), an in specie transfer moves assets between pension wrappers. The distinction matters for tax treatment and the rules that apply.
Pension input period: The pension input period is the period over which pension contributions are measured against the annual allowance. Since 2016, the pension input period for all pension schemes is aligned with the tax year (6 April to 5 April). Contributions made within a single pension input period are tested against the annual allowance for that year.
Loanback: A loanback is where the SSAS lends money to its sponsoring employer. HMRC permits this arrangement within strict rules: the loan must not exceed 50% of the scheme's net asset value at the time of lending; it must be secured by a first legal charge over an asset of at least equal value; it must carry interest at a rate of at least 1% above the Bank of England base rate; and it must be repaid within five years. A correctly structured loanback allows a director to inject capital into their business while keeping the funds within the pension environment. See our pension loanback guide for more.
Debenture: A debenture is a legal document that records and secures a loan. In the context of a SSAS loanback, the debenture is registered at Companies House and gives the SSAS a first legal charge over an asset of the sponsoring company — typically property or equipment — as security for the loan. The debenture protects the pension fund if the company defaults on repayment.
Unconnected third-party loan: An unconnected third-party loan is a loan made by the SSAS to a borrower who has no connection to the scheme members, their families, or companies they control. These loans are permitted (unlike loans to connected parties, which are restricted) and can be a way for the SSAS to generate a commercial return on its funds while supporting businesses outside the director's immediate circle.
Commercial property: Commercial property is land or buildings intended for business use — including offices, warehouses, industrial units, retail premises, and agricultural land. A SSAS can purchase and hold commercial property directly, with rental income accumulating free of Income Tax within the fund. A SSAS cannot hold residential property, including holiday lets and student accommodation. Purchasing commercial property through a SSAS is one of the most popular uses of the scheme for property-focused directors.
Market value: Market value is the price an asset would reasonably be expected to achieve in an arm's-length sale on the open market. All SSAS transactions — including property purchases, loanbacks, and in specie contributions — must be carried out at market value to comply with HMRC rules. For property, market value must be certified by an independent RICS-qualified surveyor.
Diversification: Diversification means spreading pension fund assets across a range of different investments to reduce the risk of any single holding damaging the fund. Within a SSAS, this might mean holding commercial property alongside cash deposits, government bonds, or equities. The flexibility of a SSAS to hold a wide variety of assets makes genuine diversification more achievable than in most standard pension arrangements.
Qualifying recognised overseas pension scheme (QROPS): A qualifying recognised overseas pension scheme (QROPS) is a non-UK pension scheme that meets HMRC requirements, allowing UK pension funds to be transferred into it without triggering an unauthorised payment charge. Directors who are relocating abroad may consider a QROPS transfer, though the rules are complex and specialist advice is essential before proceeding.
Drawdown: Drawdown (or pension drawdown) allows a SSAS member to take income directly from their pension fund rather than converting it to an annuity. The member's fund remains invested while they draw an income. Drawdown can be taken from age 55 (rising to 57 in April 2028). The amount drawn is subject to income tax. The fund continues to grow within the tax-advantaged pension wrapper.
SSAS Drawdown: SSAS drawdown refers specifically to the withdrawal of income directly from a Small Self-Administered Scheme. The rules are the same as for other defined contribution schemes: income is taxable, and the fund remains invested. The flexibility of a SSAS means the fund can continue to hold commercial property or other investments while the director draws an income from it.
Lump sum: A pension lump sum (also called a pension commencement lump sum or tax-free cash) is a one-off cash payment taken from the pension at the point of accessing benefits. Up to 25% of the fund can be taken as a tax-free lump sum, subject to a lifetime cap of £268,275 across all pension schemes. Any lump sum above this cap is subject to income tax. The remainder of the fund goes into drawdown or is used to purchase an annuity.
Pension commencement lump sum (PCLS): The pension commencement lump sum (PCLS) is the technical term for the tax-free cash a member can take when they first access their pension benefits. It is capped at 25% of the pension fund value, with a lifetime maximum of £268,275 across all schemes. The PCLS replaced the old "tax-free cash" terminology following the 2023 pension reforms.
Lump sum allowance: The lump sum allowance (LSA) is the maximum total tax-free cash a member can take from all their pension schemes across their lifetime — currently £268,275. It replaced the 25% of the (now abolished) lifetime allowance cap. Taking any tax-free cash uses up part of the lump sum allowance. Any lump sum above the allowance is subject to income tax.
Lifetime allowance: The lifetime allowance was the maximum total pension fund value a member could accumulate across all schemes before incurring additional tax charges. It was abolished with effect from 6 April 2023. It has been replaced by the lump sum allowance (£268,275) and the lump sum and death benefit allowance (£1,073,100), which cap the amount of tax-free cash that can be paid rather than the total fund size.
Annuity: An annuity is a guaranteed income for life, purchased from an insurance company using pension fund money. The member exchanges a lump sum for a fixed or inflation-linked income that continues until death. Annuities provide certainty but lack the flexibility of drawdown. Directors with SSAS arrangements typically choose drawdown over annuity purchase, but an annuity can be appropriate where a guaranteed income is the priority.
Pension freedom: Pension freedom refers to the rules introduced in April 2015 that allow defined contribution pension members — including SSAS members — to access their pension savings flexibly from age 55. Before 2015, most members were required to purchase an annuity. Under pension freedom, members can take the whole fund as cash, move into drawdown, buy an annuity, or combine these options. Flexible access can trigger the Money Purchase Annual Allowance.
Beneficiary: A beneficiary is a person nominated to receive death benefits from the SSAS if the member dies. Members nominate beneficiaries using an expression of wishes form. Trustees have discretion over who receives the benefits, which keeps the fund outside the member's estate for Inheritance Tax purposes (until April 2027, after which unused pension funds will generally be included in the estate). Beneficiaries can include family members, trusts, or charities.
Defined contribution pension: A defined contribution (DC) pension is one where contributions are paid in, invested, and the eventual fund value depends on investment performance and the amount contributed. A SSAS is a type of defined contribution pension. It differs from a defined benefit (or final salary) scheme, where the retirement income is linked to salary and years of service regardless of investment returns.
SIPP: A Self-Invested Personal Pension (SIPP) is a personal pension that offers investment flexibility similar to a SSAS. The key differences: a SIPP is a personal arrangement not tied to an employer, so any individual can open one; a SIPP cannot make loans to the member's business; and a SIPP is managed by the provider, not by the member as trustee. A SSAS is generally better suited to company directors who want to combine pension saving with business finance.
Family Investment Company (FIC): A Family Investment Company (FIC) is a private limited company established to hold and grow family wealth in a tax-efficient structure. Directors typically fund the FIC by transferring cash or assets into it; the FIC then invests and accumulates returns at corporation tax rates rather than personal tax rates. By issuing different classes of shares to family members, the founder can control who benefits economically while retaining voting control. A FIC is widely used alongside a SSAS as part of the Lifetime Business Tax Plan. See TLPI's FIC page for more.
Share classes: Share classes are different categories of shares in a company, each carrying different rights to dividends, capital, and votes. A FIC typically uses multiple share classes to separate economic benefit from voting control — for example, A shares held by the founder (carrying votes), B shares held by adult children (carrying dividend rights), and preference shares providing priority over capital returns. Share class structure is central to how a FIC achieves its Inheritance Tax and succession planning objectives.
Trust: A trust is a legal arrangement in which assets are held by trustees for the benefit of beneficiaries, according to the terms of a trust deed. Family trusts are sometimes compared to FICs as an estate planning tool. The key differences: discretionary trusts are subject to ten-year anniversary charges and entry charges; a FIC avoids these charges and uses familiar company law instead. TLPI specialises in the FIC structure rather than trust arrangements.
The Lifetime Business Tax Plan (LBTP): The Lifetime Business Tax Plan (LBTP) is an integrated tax planning framework developed by TLPI that combines a SSAS pension and a Family Investment Company (FIC) into a single coordinated strategy. The SSAS reduces the Corporation Tax the company pays on its profits and grows pension assets tax-free. The FIC receives surplus cash and builds long-term family wealth in a structure that reduces Inheritance Tax. Together, they address the director's tax position across the full life of their business. See TLPI's LBTP page for more.
Inheritance Tax (IHT): Inheritance Tax (IHT) is a tax charged on the estate of a person who has died, applied at 40% on the value of the estate above the nil-rate band (currently £325,000, plus a residence nil-rate band of £175,000 where applicable). For company directors, reducing IHT exposure is a key planning objective. Strategies include SSAS pension nominations (effective until April 2027), gifting shares in a FIC, and claiming Business Property Relief on trading business assets. TLPI specialises in IHT planning for directors.
Business Property Relief (BPR): Business Property Relief (BPR) is a relief from Inheritance Tax available on certain business assets, including shares in trading companies. Qualifying assets can attract 100% or 50% relief, meaning they pass outside the taxable estate. From 6 April 2026, the 100% rate is capped at £1 million per person per estate — above that, the relief drops to 50%. BPR is only available on genuine trading businesses; investment companies (such as those holding buy-to-let property) do not qualify. Excepted assets — cash or investments not needed for trading purposes — can also reduce the relief available. See TLPI's BPR page for more.
Excepted assets: Excepted assets are assets held by a business that HMRC considers surplus to trading requirements and therefore not eligible for Business Property Relief. Common examples include large cash balances beyond what the business needs for its operations, and investment portfolios held alongside a trading business. The surplus cash trap — where a successful company builds up cash that undermines its BPR eligibility — is a risk TLPI helps directors identify and address. See the surplus cash trap explained.
The surplus cash trap: The surplus cash trap occurs when a trading company accumulates cash or investments beyond the level needed for its day-to-day operations. HMRC may treat this surplus as excepted assets, which reduces or eliminates the Business Property Relief available on the company's value. Directors who allow cash to build up in their company risk a larger Inheritance Tax bill on death. Contributing surplus cash to a SSAS or transferring it into a FIC are two of the main strategies for resolving the surplus cash trap. See TLPI's guide to the surplus cash trap.
Surplus company cash: Surplus company cash is the cash held by a limited company that exceeds what is needed for its normal trading operations. It is the underlying cause of the surplus cash trap. HMRC's view is that cash accumulated beyond operational needs is not part of the active business and should not benefit from Business Property Relief. Directors are advised to review their cash position regularly and take appropriate action before the cash becomes a liability.
Capital Gains Tax (CGT): Capital Gains Tax (CGT) is charged on the profit made when an asset that has increased in value is sold or transferred. Within a SSAS, investments grow free of Capital Gains Tax — rental income and capital gains on pension assets are not taxed. Outside the pension, CGT applies to property disposals, share sales, and other asset transfers. Transferring assets into a SSAS or FIC can defer or avoid CGT, depending on the structure and timing.
Inheritance Tax planning: Inheritance Tax planning is the process of arranging a person's affairs to reduce the Inheritance Tax that will be payable on their estate. For company directors, this typically involves a combination of: SSAS pension nominations, gifting shares in a Family Investment Company, claiming Business Property Relief, and using the annual gift exemption. Effective planning requires a long-term view — many IHT strategies require assets to be in place for seven years before they fall fully outside the estate.
HMRC: HMRC stands for His Majesty's Revenue and Customs. HMRC is the UK government department responsible for collecting taxes, administering tax relief, and regulating pension schemes. A SSAS must be registered with HMRC as a registered pension scheme. HMRC sets the rules on what a SSAS can and cannot do, and imposes tax charges where the rules are breached.
The Pensions Regulator (TPR): The Pensions Regulator (TPR) is the regulatory body responsible for overseeing occupational pension schemes in the United Kingdom, including SSAS arrangements. TPR sets standards for scheme governance, trustee conduct, and member protection. It has the power to investigate schemes, issue fines, and disqualify trustees. SSAS trustees are accountable to both HMRC and TPR.
TLPI: TLPI is a specialist tax planning firm for UK company directors. TLPI provides SSAS pension establishment and administration, Family Investment Company structuring, Business Property Relief planning, and the integrated Lifetime Business Tax Plan. TLPI is not FCA-regulated and does not provide regulated financial advice. TLPI is not an acronym — it is simply the firm's trading name.
SIPP: A Self-Invested Personal Pension (SIPP) is a personal pension that provides investment flexibility, including the ability to hold commercial property. Unlike a SSAS, a SIPP is a personal arrangement not tied to an employer, and cannot make loans to the member's business. SIPPs and SSAS are often compared; for company directors who want to combine pension saving with business finance, a SSAS is generally the more appropriate structure. See SSAS vs SIPP explained.

Glossary and definitions

The Small Self-Administered Scheme (SSAS)

SSAS pension contributions and tax relief

SSAS investments and loanbacks

Pension benefits and access

Family Investment Company (FIC)

Tax reliefs, Inheritance Tax, and the Lifetime Business Tax Plan

Regulatory bodies, general terms, and abbreviations