Most company directors approach tax planning one structure at a time. They set up a SSAS pension to reduce their Corporation Tax bill. Or they establish a Family Investment Company (FIC) to pass wealth to the next generation. Rarely do they consider what happens when the two work together.
The combination of a SSAS and a FIC is not a shortcut or a workaround. It is a deliberate, long-term structure designed to address the two biggest financial challenges directors face: reducing the tax their company pays on its profits today, and ensuring those accumulated assets pass efficiently to the family in the future. Together, they form the foundation of what TLPI calls the Lifetime Business Tax Plan.
No accountancy firm writes about the SSAS and FIC working in combination. That gap exists because most advisers specialise in one or the other. Understanding how the two structures complement each other - and why the April 2027 pension Inheritance Tax rule changes make this combination more urgent than ever - is what this article covers.
A Small Self-Administered Scheme (SSAS) is a type of occupational pension open to directors and senior employees of limited companies. Unlike a personal pension or a Self-Invested Personal Pension (SIPP), a SSAS is established by the company itself and is controlled by its members as trustees.
Directors use a SSAS for several reasons. The most immediate is Corporation Tax relief. Employer contributions to a SSAS are a deductible business expense, which reduces the company's taxable profit in the year the contribution is made. For a company paying Corporation Tax at 25%, a £50,000 employer contribution generates a £12,500 tax saving - in the same accounting period.
Beyond the tax relief, a SSAS can invest directly in commercial property, loan money back to the sponsoring company at commercial rates of interest, and hold a wide range of assets that a standard workplace pension cannot. This makes the SSAS a working capital tool as well as a retirement vehicle.
The SSAS is also exempt from the Lifetime Allowance (abolished in April 2024) and has historically been treated as sitting outside the director's estate for Inheritance Tax purposes. That last point is changing in April 2027, and it is one of the reasons the SSAS and FIC combination is attracting more attention now. You can read more about those changes in our article on pensions and Inheritance Tax from 2027.
A Family Investment Company (FIC) is a private limited company set up by a director (or a couple) with the specific purpose of holding and growing family wealth. Unlike a trading company, a FIC exists to own investments - property, shares, cash, loans - and to distribute income and capital to family members in a tax-efficient way.
The founding director typically takes preference shares, retaining control and priority over any capital return. Family members - children, spouses, future generations - hold ordinary shares that carry the rights to income and capital growth. This structure allows the director to move wealth out of their estate while retaining day-to-day control of the assets.
Directors use a FIC primarily for Inheritance Tax planning. Assets held inside the FIC are owned by the company, not by the director personally. Provided the shares were gifted more than seven years before death, they fall outside the estate. Even within the seven-year window, careful structuring of share classes means the economic interest - and therefore the inheritance - can be shifted to the next generation without the director losing control of the underlying assets.
A FIC also allows surplus cash from a trading company to be extracted and reinvested at Corporation Tax rates (25% or lower) rather than Income Tax rates (up to 45%), which makes it significantly more efficient as a wealth accumulation vehicle than holding surplus cash personally. For more on how FIC structures interact with Inheritance Tax planning, see our Family Investment Company guide.
The SSAS and FIC address different problems, which is precisely why they work well together. A SSAS is best suited to pension accumulation and reducing the Corporation Tax liability on trading profits. A FIC is best suited to surplus cash extraction and long-term Inheritance Tax planning. Neither structure does both jobs well on its own.
Here is how the two structures typically interact in a single director's tax plan.
The trading company makes employer pension contributions to the SSAS. These contributions are deductible against the company's profits before Corporation Tax is calculated. The SSAS can accept contributions from multiple group companies, which makes it particularly useful for directors who have more than one trading entity.
The SSAS invests those contributions in assets chosen by the trustees - commercial property, equities, government bonds, or a loanback to the company. Investment growth inside the SSAS is free of Income Tax and Capital Gains Tax. This is the compounding advantage of pension wrappers: contributions that would otherwise be paid as Corporation Tax become invested assets growing in a tax-sheltered environment.
Not all profit can be sensibly contributed to a pension. Pension annual allowances limit how much can be contributed each year with tax relief (currently £60,000 per annum, though the SSAS's ability to carry forward unused allowances from the previous three years can increase this substantially). Profit above the pension contribution threshold - the surplus that sits in the company's bank account earning little and attracting Corporation Tax - is the FIC's territory.
The director loans that surplus cash from the trading company to the FIC, or in some cases extracts it as a dividend and invests it personally before subscribing for FIC shares. Inside the FIC, the cash is invested - typically in property, a portfolio of equities, or other long-term assets - and grows at corporate tax rates rather than personal tax rates.
Over time, the SSAS builds a pension fund that the director draws on in retirement. The FIC builds a pool of family wealth that passes to the next generation through carefully structured share classes, with the director retaining control throughout.
The combination means the director has addressed both problems simultaneously. The SSAS handles the retirement income and reduces the Corporation Tax bill year by year. The FIC handles the wealth transfer and protects against the Inheritance Tax liability that would otherwise accumulate as the business and personal estate grow.
TLPI uses the term Lifetime Business Tax Plan (LBTP) to describe the integrated use of a SSAS and a FIC - together with Business Property Relief and other relevant structures - as a single, coherent tax strategy for the director's lifetime in business.
The plan is not a product. It is a framework that acknowledges the director's tax problem does not start or end in one financial year. It starts when the company begins generating profit and it ends when those accumulated assets pass to the director's family - either during their lifetime or on death.
The structures that solve this problem at each stage are well established in UK tax law. A SSAS has existed as a structure since 1973. A FIC is recognised under the Companies Act 2006 and is increasingly scrutinised by HMRC - not because it is aggressive, but because it is effective. Business Property Relief has been part of the Inheritance Tax framework since 1976. What the Lifetime Business Tax Plan does is connect these structures so they work together rather than in isolation.
The result is a director whose Corporation Tax bill is reduced each year by pension contributions, whose retirement is funded inside a self-administered pension they control, and whose family wealth passes to the next generation at a fraction of the Inheritance Tax that would apply without planning. Learn more about how the LBTP works in practice on our Lifetime Business Tax Plans page.
From April 2027, pension funds will be brought into scope for Inheritance Tax for the first time. Under current rules, a SSAS sits outside the director's estate and passes to nominated beneficiaries without an Inheritance Tax charge. From April 2027, unused pension funds will be included in the estate and taxed at 40% on death, subject to the nil-rate band.
This change significantly alters the planning calculation for directors who have built large SSAS pension pots specifically as a tax-efficient way of passing wealth to the next generation. The SSAS retains all of its Corporation Tax advantages - contributions are still deductible, growth is still tax-sheltered, and the pension remains a powerful retirement vehicle. But it is no longer the estate planning tool it once was.
The FIC becomes considerably more important in this context. Assets held inside a FIC are not subject to the April 2027 pension Inheritance Tax rules. They sit outside the director's personal estate if the shares are properly structured and gifted, and they can be passed to children and grandchildren without the 40% charge that will apply to large pension funds from 2027 onwards.
The BPR changes introduced in April 2026 also affect the planning landscape. The £1 million cap on Business Property Relief means directors can no longer rely on BPR alone to shelter business assets from Inheritance Tax. A FIC does not attract BPR in the same way a trading company does, but its structure - and the careful gifting of shares to the next generation - offers a route that the capped BPR rules cannot. Read our BPR changes 2026 guide for detail on how those rules affect directors.
Taken together, the April 2026 BPR changes and the April 2027 pension Inheritance Tax changes make the SSAS and FIC combination more relevant now than it has been for twenty years. Directors who have relied on a SSAS for estate planning and BPR for business asset relief will need to review both of those assumptions before 2027.
The SSAS and FIC combination works best for directors who meet the following profile.
A limited company generating consistent profit - ideally above £100,000 per annum - and paying Corporation Tax at or near the 25% rate. The tax relief on SSAS contributions is most valuable at the higher rate, and the FIC's ability to hold and grow surplus cash efficiently requires a meaningful level of trading profit to begin with.
A director who is thinking beyond the current tax year. Both structures deliver their strongest returns over a ten to twenty year horizon. A SSAS compounds free of tax for decades. A FIC builds family wealth across generations. Directors who are approaching retirement in the next two to three years need a different conversation, though elements of both structures may still apply.
A family where the next generation is old enough to be named as shareholders in the FIC. The FIC's Inheritance Tax advantages depend on shares being gifted and on the seven-year clock running. The earlier those shares are issued and gifted, the more efficient the outcome.
A director who has either surplus cash sitting in the company or a significant property portfolio that they intend to pass to the family. The FIC is not the right structure for cash the director needs to operate the business. It is for the wealth that has accumulated beyond the operating needs of the company.
If this profile describes your situation, the Lifetime Business Tax Plan is worth exploring. TLPI works with company directors to design and implement the full structure - SSAS, FIC, and any additional elements such as Business Property Relief planning - as a coordinated strategy rather than a collection of separate products.
A Lifetime Business Tax Plan (LBTP) is an integrated tax planning structure for company directors that combines a Small Self-Administered Scheme (SSAS) pension, a Family Investment Company (FIC), and relevant reliefs such as Business Property Relief into a single, coordinated strategy. The goal is to reduce the Corporation Tax the company pays on its profits, accumulate retirement wealth in a tax-sheltered environment, and pass that wealth to the next generation in the most Inheritance Tax-efficient way available. The Lifetime Business Tax Plan is not a product - it is a framework designed to address the director's full tax position across the life of their business, rather than solving one tax problem at a time.
A SSAS and a FIC address different parts of the director's tax problem. The SSAS handles pension accumulation and Corporation Tax reduction: employer contributions to the SSAS are deductible against the company's taxable profits, and the pension fund grows free of Income Tax and Capital Gains Tax. The FIC handles surplus cash and Inheritance Tax planning: cash that cannot be contributed to the pension (because of annual allowance limits or because it exceeds the pension's usefulness as an estate planning tool) can be moved into the FIC, where it grows at corporate rates and can pass to the next generation through carefully structured share classes. Together, the two structures cover the full range of the director's tax planning needs - Corporation Tax in the trading years, retirement income for later life, and Inheritance Tax efficiency for the wealth that passes to the family.
The Corporation Tax reduction comes primarily from the SSAS. Employer pension contributions to a SSAS are a deductible business expense under HMRC rules, which reduces the company's taxable profit in the year the contribution is made. A company paying Corporation Tax at 25% saves £25,000 in Corporation Tax for every £100,000 it contributes to the SSAS. The FIC does not itself generate Corporation Tax relief in the same direct way - its role is to receive surplus cash that has already had Corporation Tax paid on it and to invest that cash more efficiently than the director could personally. However, a FIC can receive loans from the trading company (rather than dividends, which are paid from post-tax profits), and the interest it pays on those loans may be a deductible expense for the FIC. The precise structure depends on the director's position and must be designed to HMRC's rules on related-party loans and transfer pricing.
Until April 2027, a SSAS sits outside the director's estate for Inheritance Tax purposes, meaning the pension fund passes to nominated beneficiaries without an Inheritance Tax charge. From April 2027, unused pension funds will be included in the estate and subject to Inheritance Tax at 40%. This change makes the FIC a more important tool for estate planning. Assets held inside a FIC are owned by the company, not by the director personally. Ordinary shares in the FIC can be gifted to children and grandchildren - if those gifts survive seven years, they fall entirely outside the estate. Even within the seven-year window, gifts are subject to taper relief after three years. The FIC also allows the director to retain preference shares with priority over capital, meaning they maintain effective control of the underlying assets even after gifting the economic interest to the next generation. Business Property Relief, where it applies, can provide a further layer of protection - though the April 2026 changes cap that relief at £1 million per person. See our guide to the BPR changes for more detail.
The combination works best for directors of profitable limited companies - typically generating consistent annual profit above £100,000 - who are thinking about their tax position over a ten to twenty year horizon rather than a single tax year. It is particularly well-suited to directors who have surplus cash accumulating in the company beyond the operating needs of the business, who have family members they want to benefit from the company's success, and who are concerned about the Inheritance Tax position of their estate. The SSAS element requires the company to be a sponsoring employer, so sole traders and partnership businesses cannot use it directly. The FIC element works for any director with surplus cash or assets they wish to transfer out of their personal estate while retaining control. Directors approaching retirement in the short term may find the SSAS less relevant, but the FIC can still be established and funded. A TLPI consultation will identify which elements are appropriate for a given director's position.
The first step is a planning conversation with a specialist who understands both structures and how they interact. A SSAS and a FIC are not interchangeable products - the structure that works for one director may not be appropriate for another, depending on the size of the company's profits, the director's age and retirement timeline, the family's circumstances, and the assets already in the estate. TLPI works with company directors to assess the full picture before recommending a structure. That assessment typically covers the company's Corporation Tax position, the director's pension position (including any existing pension arrangements), the family's Inheritance Tax exposure, and the director's goals for the business and beyond. Once the assessment is complete, the design of the SSAS, the FIC, and any additional elements follows. To begin that conversation, visit our Lifetime Business Tax Plans page or contact TLPI directly.