Frequently asked questions

A Lifetime Business Tax Plan is a packaged solution, exclusively for company directors, that enables them to solve multiple problems for their business and offers tools to:

• Solve the immediate threat of a 40% tax penalty on surplus company cash
• Transfer in company and pension cash to create significant liquidity
• Protect family wealth and assets
• Secure inheritance of company shares
• Achieve wider investment choices in a low to zero tax plan
• Create lifetime and beyond tax and inheritance strategies
• Fund your business
• Create succession plans
• Grow the retirement fund
• Invest in property

Lifetime Business Tax Plans encompass two major components; the Family Investment Company and the Small Self-Administered Scheme (SSAS). These exclusive tax mitigation plans also allow directors to transfer in former work pensions that are frozen or unmanaged. The transfer of company cash and former pension cash into one plan can create significant liquidity, providing wide investment choice in a low to zero tax plan.

Yes, because legislation has created the components.

• The Family Investment Company is recognised by HMRC as a standard way of preserving family assets for future generations whilst mitigating any tax.
• A company tax-exempt savings account, technically known as a SSAS (Small Self-Administered Scheme), is also recognised by HMRC as a standard form of investment savings vehicle for a company.

Both of these essential components of the Lifetime Business Tax Plan need to be registered with HMRC and annual compliance reporting is required to notify them of the assets held and the returns generated, albeit no tax will be due.

The 20% rule is a good way of assessing the point at which HMRC will determine your company is a trading company or an investment company.

• Less than 20% of your trading company’s income will come from investment activities,

• Less than 20% of your company’s expenses will relate to investment activities,

• Your role within the company is such that no more than 20% of your time is spent on investment activities

• Investment of less than 20% of assets may take place

The 20% rule is explained further in our free guide to the Lifetime Business Tax Plan – download link 

A Lifetime Business Tax plan can invest in a wide variety of asset classes, including:

• Commercial property
• Hands off property investment
• Your own business
• Stocks and shares
• Property development loans

And much, much more

Yes, with only a few exceptions, current personal and workplace pensions can be transferred to a SSAS.

To make a transfer, simply contact your existing pension provider and ask them to transfer the old pensions into your new SSAS. Your old pension provider will send some paperwork in the post which you will need to sign and return to them.

Always consider any benefits you are giving up by transferring your old pension as these may be lost when you move the pension. Your current pension provider can provide this information in writing or over the phone.

Contributions can be paid in as a lump sum or regular contributions. Employer contributions can also be made.

Yes. This is just one of the great advantages of a SSAS pension. Consolidating your current pensions has many benefits, such as increasing your investment funds and choices, reducing costs as there is then only one set of fees/charges, and making your pensions easier to monitor.

Yes. Pooling the pensions of other members within the SSAS increases the pot and investment choices and its potential for growth. It also means that only one set of fees/charges per scheme is payable, as opposed to individual members all paying their own sets of fees.

SSAS stands for Small Self-Administered Scheme. This is a corporate pension scheme that is managed by trustees of the scheme. It can be set up by company directors. Members of the SSAS can choose how their pension funds are invested. It gives all members of the SSAS scheme more control over their pensions.

A SSAS is a pension trust that gives its members control of their pension funds and assets. A SSAS allows members to invest funds at their own discretion.

A SSAS has access to every type of investment that is allowed under rules set out by legislation, as with traditional pensions. In addition, a SSAS has additional investment privileges, such as investing in property or investing in your business, amongst other things. You can make permitted investments at any age; you do not need to be 55 to take control of the money in your pension.

Click here to download a beginner’s guide

A Small Self-Administered Scheme (SSAS) is a pension exclusively for business owners/company directors. The company director sets up the SSAS and is then able to invite up to 10 other members to be part of the scheme. Members can be other company employees or family members.

Yes. Fees and costs can be paid by the SSAS or by the company.

• As a SSAS is registered with HMRC as a UK registered pension scheme, it becomes an extremely tax-efficient wrapper.
• Sponsoring Employers are able to make contributions and receive upfront tax relief, saving corporation tax.
• Assets held within the SSAS are free of Corporation Tax, Income Tax, Capital Gains Tax, and has decreased Inheritance Tax liabilities.
• Personal and company assets can be transferred into the SSAS as contributions.
• Commercial property held by the SSAS, for example, the company business premises, can grow tax-free within the SSAS whilst earning tax-free gains (rent) from the company, as it does so. Rent is not lost to a landlord.
• When using the loanback facility, loan payments go back into the SSAS, as opposed to paying the bank. This then grows tax-free within the SSAS.
• Additional family members can be added to the SSAS to create a tax-efficient family trust.
• Family assets can be held within the SSAS are ring-fenced from creditors.

There are no drawbacks to a SSAS pension. A SSAS gets all the same benefits as any other UK pension scheme, such as tax breaks, lifetime limits, drawdown age and 25% tax free cash at age 55, along with the new flexi-drawdown rules. A SSAS is the ultimate director’s, property and business pension.

Most people take little interest in their pensions but when they realise all of the benefits of a SSAS and how the money locked in a pension can be used by SME directors, small businesses and families, the SSAS pension suddenly becomes a very attractive tool to have as a part of your business plans.

Timescales can vary, depending upon relevant checks and paperwork required. Requesting your pension transfer values and setting the transfers in motion quickly will help. It can take a number of weeks to register your SSAS with HMRC and ensure everything is up and running correctly.

A SSAS is an ideal tool for family businesses and as a family trust. HMRC rules allow family members  to be invited to be members of the trust. Having a family SSAS is extremely useful for inheritance planning. With a family SSAS, tax efficiency can be optimised. As pensions are pooled, a family SSAS has great flexibility with regard to taking benefits at retirement and asset transfers. Assets can be held within the SSAS and taken as benefits or left in the SSAS as part of the legacy, as cash benefits are taken when a family member retires. For family businesses, the SSAS allows greater business continuity as family members retire or join the business.

• A SSAS is a corporate pension and can have up to 11 members
• A SIPP is a personal pension and only for individuals
• A SSAS is exclusively available to company directors
• SSAS costs are charged per scheme rather than per member
• A SSAS is its own individual trust and can make its own investment choices
• A SIPP is regulated by the FCA and HMRC
• A SSAS is regulated by HMRC and The Pensions Regulator (TPR)
• A SSAS can loan 50% of its funds to the business
• A SSAS can invest in commercial property
• A SSAS can invest in hands-free residential property 

Read more…

• A SSAS is allowed to invest in everything that traditional pensions can invest in and is afforded the same tax advantages as other pensions.
• A SSAS can be used to achieve optimum tax efficiency
• A SSAS can loan 50% of its funds to your company for whatever business purposes you see fit
• A SSAS can loan to an unconnected 3^rd party
• A SSAS can invest in commercial property
• A SSAS can invest in hands-free residential property 
• A SSAS can ring-fence family assets with ultimate tax efficiency
• A SSAS can invest in hands-free property investments.

• A SSAS gives you more control and more flexibility
• A SSAS allows you to pool your pension funds, as well as those of other members
• A SSAS is extremely tax-efficient
• A SSAS allows you to invest pension funds into your business
• A SSAS allows you to invest pension funds at your own discretion

Click to download a beginner’s guide

No. The SSAS has been around since 1973. It was created exclusively for company directors as a corporate pension that is fully compliant with HMRC and The Pension Regulator rules and regulations.

A SSAS is regulated by The Pensions Regulator and must abide by rules and regulations set out by HMRC.

One of the great advantages of a SSAS is that members have more control over their pensions than with other pensions. As a trust, investments are made at the member’s discretion for the benefit of its members.

Whilst this partly allows a SSAS to self-regulate, a SSAS is also regulated by The Pensions Regulator. In addition, it must be registered with HMRC and abide by HMRC rules and regulations.

Read more…

SSAS pensions are regulated by HMRC & The Pensions Regulator.

Visit HMRC

Visit The Pensions Regulator

You can also read more here

A SSAS Practitioner is a person or a company that helps with the setup of a SSAS. The SSAS Practitioner is not a responsible role.

Read more…

Usually, the Scheme Administrator will register the scheme with HM Revenue & Customs (HMRC)

The Scheme Administrator will report to the HMRC and provide information or responses to HMRC queries

The Scheme Administrator will provide reports and information to the scheme members and relevant regarding lifetime allowances, benefits and transfers

The Scheme Administrator will undertake tasks to ensure the current maintenance and tax position of the SSAS.

Whilst not a legal requirement to have professional legal and compliance support, TLPI strongly recommend you ensure this is part of the service you employ to help protect the scheme from breaching HMRC rules and The Pensions Regulator’s regulations. Specialist knowledge of pensions and tax is important to ensure the SSAS is administered correctly and in accordance with HMRC requirements and legislation. However, each SSAS does require a Scheme Administrator (the administrator is an official role required by HMRC for Registered Pension Schemes).

You are able to invite up to 10 additional members to the scheme. Members can include other company directors or employees or family members.

No, not necessarily. Each member retains the proportion of the pot that they put in. As the pot grows, so does each individual proportion.

SSAS pension funds can be invested in many ways. The SSAS can invest in everything that traditional pensions can, with the same tax benefits, plus much more. For example, invest in property or loan to your business.

TLPI take the time to understand your situation, strategies and goals. We then support you by providing the knowledge and tools to ensure your longer term SSAS strategies are working to grow your SSAS, support your business and achieve the retirement you desire. We are able to offer expert pension, property investment, tax and investment strategy advice and support. To book a call at a time to suit you, please Click here.

Yes. A privilege of a SSAS pension is that it can invest in commercial property. Read more…

A SSAS cannot directly invest in or hold residential property. It can purchase development land and sell prior to the building becoming habitable. An alternative is to invest in residential property in a hands-off manner. For example, you can loan to an unconnected developer or you can loan to your company and use the loan to invest in any business purpose you see fit. Read more…

A SSAS is able to make 3rd party loans. This means to parties that have no connection with the SSAS.

Loans directly to a SSAS member, or to a spouse or relative of a SSAS member are prohibited.

Using the SSAS’s unique loanback facility, you can make loans to your company of up to 50% of the total combined fund value. This can be repeated once the loan has been repaid.

An important question that many ask is ‘What happens if a member of a SSAS dies?’ Family members (and other dependants) can access the funds in a Small Self Administered Scheme (SSAS) if the member of the SSAS dies, but there are restrictions. It’s possible for a lump sum to be paid to a nominated beneficiary completely tax free, making an SSAS an excellent inheritance planning tool — if used properly.

However, this depends on specific circumstances, including whether or not the member has started drawing funds from the SSAS and how old the SSAS member was when they died.

Family members will be able to access a SSAS if a member dies before drawing the funds. The simplest option is to pay a lump sum to a person nominated in writing. Lump sums are typically free from all kinds of tax, including inheritance tax, income tax and pension tax. There is however, an exception: If contributions are made to the SSAS in the two years prior to death, as an attempt to reduce the SSAS member’s estate, this money may be liable for inheritance tax.

Alternatively, the amount can be paid as pension income to a dependant. In this case, income tax must be paid on the amount and the recipient must be a dependant.

If the SSAS member dies before drawing funds and was over 75, the benefits are paid out as if from a drawdown fund.

A lump sum paid out from a drawdown fund is taxed at 55%. You can pay anyone nominated in writing from a drawdown fund.

Money from a drawdown fund may be paid as income pension to a dependant as normal, which would be subject to income tax.

If you have no surviving dependants, the money from a drawdown fund may be paid to a nominated charity, without any tax deductions.

The Lifetime Allowance is a limit on the amount that can be taken from a pension scheme, either as a lump sum or as retirement income, and can be paid without triggering an extra tax charge. The amount drawn from a SSAS — or paid as a lump sum to a beneficiary — is tested against the lifetime allowance. For the tax year 2023/24, the lifetime allowance in the UK is £1,073,000.

Previously, you would have had to pay a charge on any pension savings over this amount. However, in April 2023 the charge was removed, and the lifetime allowance is set to be completely abolished by April 2024.

Each scheme will have a different arrangement in place in the event a member of the SSAS dies while drawing their pension. It’s possible to arrange a lump sum, a continuing pension income for a fixed time, or a dependant’s pension.

If a lump sum payment is arranged, this will be taxed at 55% and is limited to 20 times the amount of the original pension (minus the amount already paid to the SSAS member).

A dependant’s pension can only be paid to someone who is a dependant of the SSAS member who died. A dependant may be a spouse, civil partner, common-law partner, a child aged 23 or under, anyone financially dependent on the SSAS member, or anyone who is dependent on the member due to physical or mental impairment.

A dependant’s pension is not tested against the Lifetime Allowance, but it is taxed at the appropriate rate of income tax to the recipient. A dependant can draw their pension in a number of different ways, including a capped drawdown, a flexible drawdown (only if they qualify for the scheme in their own right), a scheme pension, or a lifetime annuity.

A lifetime annuity is a product that you can buy with your pension fund, which guarantees an income for life. If you’re a member of a SSAS and you’re drawing funds, you can use these funds to purchase an annuity. However, it’s vital you carefully check the terms of the annuity. When the recipient of an annuity dies, a lump sum may be paid to a dependant or there might be a minimum term of payments from the annuity to a dependant.

You can take our quick 60 second eligibility test to find out, or you can get in touch with us on 01235 426666 or by emailing info@tlpi.co.uk

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