What is a SSAS?
A Small Self Administered Pension scheme is commonly known as a SSAS and is a type of Registered Pension Scheme with less than 12 members and is at the core of retirement planning for many owner managed businesses – see our case studies.
A SSAS offers much greater control and investment flexibility than an ordinary pension schemes. A SSAS can invest in a wide range of assets including a loanback to the clients business, purchase of company premises or even purchase of company shares. A scheme with two or more members can be much more cost effective than each member having their own individual Self Invested Personal Pension (SIPP) as a SSAS benefits from multi-membership of the one scheme.
The SSAS is set up under trust by an employer whose employees or directors can become members. Each member is also a trustee of the scheme. The trustees are in control of the investment policy subject only to H M Revenue & Customs regulations on which we will provide technical guidance and propose workable solutions. Unlike a Self Invested Personal Pension there is no external provider whose own commercial considerations must be satisfied. Legal ownership of all scheme assets lies with the trustees who will also be the sole signatories on the pension scheme bank account. Some key features of a SSAS include:
Considerable tax benefits to encourage retirement planning. Corporation tax relief on employer pension contributions and income tax relief at the highest marginal rate for member pension contributions.
The ability to invest in a wide range of assets including land and property, shares and gilts, loans to companies, unquoted equities and derivatives etc
The fund normally grows free of income tax and capital gains tax.
At retirement, whether full or partial, there are a wide range of benefit options:
- A tax free lump sum usually up to a quarter of the member’s fund value
- A capped drawdown pension based on prevailing annuity rates
- A flexi-access drawdown option where income can be extracted much sooner under certain conditions
- A Scheme Pension
- Full or partial annuity purchase
On death the fund is available to beneficiaries who can choose between a number of options. We can provide guidance on the most tax efficient method of dealing with this.