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SSAS in a nutshell

Below, we outline the key features of a Small Self-Administered Scheme (SSAS), a UK pension exclusively for company directors. It explains how a SSAS operates, the types of investments it can hold, and the circumstances in which it may be suitable, highlighting its flexibility and role in retirement and business planning.

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SSAS stands for Small Self-Administered scheme. It offers unparalleled strategies for funding and growing your business, investing in property, mitigating IHT, growing your retirement fund, creating a legacy, and much more. It allows you to take control of your pension funds before age 55, providing control and flexibility simply not available via any other UK pension scheme. To help you get started on your SSAS journey, we have condensed all the key information you need about this innovative scheme here.

  • The SSAS is a corporate pension, exclusively available to business owners

  • It must be registered and comply with HMRC and The Pensions Regulator rules and regulation

  • The SSAS has existed for over 50 years, originating from the Finance Act of 1973

  • It was devised by Government to give business owners more control over their whole financial situation

  • It is the most versatile and flexible pension scheme in the UK

  • It can have up to 11 members made up of other directors of the company, employees, or family members

Business owners are failing to take advantage of the one thousand plus tax advantages and benefits available!

With a SSAS pension, you can take control of your existing frozen or dormant pensions, pool them in one place, and use the funds for more flexible investment opportunities – even before the age of 55. It gives business owners the control to decide for themselves how their pension funds are invested. Some options include:

  • Commercial property

  • Land

  • Green investments

  • Stocks and shares

  • Gold

  • Investment in your own business

  • Loans to unconnected 3rd parties

A variety of strategies can be employed with a SSAS pension to help business owners achieve their specific goals, whether that be property investment, funding your business, succession planning, greater pension growth, early retirement or creating a legacy for your family – all with ultimate tax efficiency!

SSAS Strategies

SSAS for Property Investment

  • A tax-efficient wrapper for property investment
  • Invest in tangible assets
  • Purchase your business premises:
    - Rent to your business – this is a business expense so is afforded Corporation Tax benefits
    - The rent received by the SSAS is not liable for income tax
    - Continues to grow your pension pot
    - If you sell the property eventually, the SSAS does not pay Capital Gains on the profit
  • Multiple property investment options, such as commercial property, development land, or hands-off property investment

SSAS for Business

  • Align your pension with your business strategy
  • Increase control over funds as well as investment choice
  • Loan up to 50% of your pension pot to your company:
    - Pay loan back into your pension over 5 years
    - Choose your own interest rate (at least 1% above market rate)
    - Reduce year-end profits which reduces Corporation Tax
    - Provide cashflow

SSAS for Families

  • Cascade SSAS pension funds and assets down through family
  • Members elect their chosen beneficiaries
  • Upon the death of a SSAS member, benefits within the SSAS can be paid at the discretion of the remaining trustees
  • Achieve smooth, hassle-free succession planning and early retirement

Combining a SSAS with a Family Investment Company

By combining the SSAS with a Family Investment Company as a Lifetime Business Tax Plan, company directors can radically mitigate tax, grow and protect wealth, and ring-fence assets.

A Family Investment Company is a private company, set up similarly to any other but with different rules applied to ensure the company invests, as opposed to trades. Cash can be moved into the company and then invested in any asset class from property to shares, and tax is only applied to the gains made through the investments, not the actual cash held.

Combined as a Lifetime Business Tax Plan, company directors can:

  • Ensure their trading company does not inadvertently become an investment company, therefore breaking HMRC rules and losing their Business Property Relief (BPR)

  • Invest and/or hold company cash

  • Protect family wealth and assets

  • Combine all of your pensions into one pot

  • Pool funds with family or company members

  • Ring-fence assets for inheritance

  • Transfer in and take control of former work pensions

  • Transfer in company and pension cash

  • Achieve wide investment choices in a tax-efficient plan

  • Achieve smooth, hassle-free succession planning and early retirement

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FAQs

What does SSAS stand for?

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.

What is a SSAS?

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

Who is a SSAS for/who can have a SSAS?

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.

Can I pay SSAS costs and fees from the SSAS scheme?

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

What are the tax benefits of a SSAS?

  • 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.

Are there any drawbacks to a SSAS pension?

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.

How long does it take to set up a SSAS?

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.

Can I set up a SSAS as a family scheme?

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.

What is the difference between a SSAS and a SIPP?

  • 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 

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What can you use a SSAS for?

  • 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 3rd 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.

Why should I have a SSAS?

  • 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

Is the SSAS a new type of pension?

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.

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