The following case study clearly highlights why all business owners should be aware of the SSAS pension, as an important business tool. If they are not, then they could be missing out on extensive tax savings and the opportunity to invest in property or their business. In addition, the SSAS pension, unlike traditional pensions, benefits from the advantage of becoming a family legacy.
Steve Brazil is a business owner, with an enduring interest in property. He and his business partner already had a small portfolio of buy-to-lets under their belt, and knew exactly what they wanted the next stage to be for their limited company, Inspire property Partners Ltd.. What Steve still needed to work out, was how to fund that next stage.
His first port of call was to look at his pensions. As Steve states, “The lack of information, access and control is extremely disappointing”, when it comes to traditional pensions. This realisation forced Steve to do some further ‘digging around’, in search of a solution to the cash-flow barrier he faced in looking to grow his company. “What immediately jumped out to me during my research was the SSAS (Small Self-Administered Scheme) pension and its unique flexibility. “Armed with the initial fruits of his research, Steve attended a property investment community meeting and asked around! “At this point, it was clear that the loanback ability of a property SSAS offered what I needed and so I needed to find the best SSAS pension advice”. Steve had noted a few advisers online but had been drawn to the expertise and 100%, 5 star reviews of The Landlord’s Pension. A recommendation from a well-versed contact at the property meeting confirmed his decision that The Landlord’s Pension had the experience and knowledge of both SSAS and property, to support his business strategy and goals.
“When I first contacted The Landlord’s Pension, I explained that my main goal was to use the SSAS to make a loan to my business”. The plan for Steve was to use the funds borrowed from the pension to purchase an additional buy-to-let. Whilst classed as a residential property, this was totally within HMRC rules as the SSAS was just making the loan to the sponsoring company, not purchasing or holding the residential property. The beauty of the loanback is that the sponsoring company is free to use those funds, whether for financing or investment purposes, as they wish. For Steve, “the potential to unlock my pension was key. The process was smooth and efficient. Simon at The Landlord’s Pension offered practical and expert knowledge which gave me the confidence to go away and research exactly how I wanted the SSAS to work for us”.
Achieving his initial goal very quickly, Steve purchased a buy-to-let in Nottingham, for cash, with the loanback funds. He explains, “The pension has a first charge on the property for security and we predict that we may even be able to pay the loanback to the pension early. Once the loan is paid back, our ongoing strategy is to do the same again, using the SSAS to purchase more property and grow our portfolio, something we just couldn’t do before starting the SSAS”.
Whilst personally keen on the hands-on side of property investment and development, Steve has loan-notes with JVIP, an impressive developer in Tunbridge Wells, intends on investing in property loans or crowd property and also just a little hedge-fund, to ensure a wide portfolio of investments.
So, as you can see, Steve quickly realised his initial goal which was to grow his business using the loanback facility. However, as Steve has quickly realised, that is just the beginning. The flexibility and control offered by the property SSAS pension is unrivaled. The loanback is fantastic, but in addition, the tax benefits make it an absolute must for any company director, looking to grow their business, invest in property and take control of their pension funds. Steve’s initial ‘loose goals’, as he phrases it, have turned into a robust and enviable long-term strategy for his business and his pension. With the support of The Landlord’s Pension, Steve is formulating even greater and more diverse strategies, using his SSAS as a vehicle for investment, growth and his future. Not only that, he no longer has the worry of ploughing pension contributions into a pension that he has no control over. Gone is the uncertainty, the confusing fees and the concern that, should he die, the pension will be swallowed up by the pension company and not go to his wife or beneficiaries.
Keen to encourage others, Steve explains that the main barrier to people investing in property seems to be either lack of interest, ignorance or lack of confidence. With more information, perhaps others could take advantage as he has, of the control the SSAS offers. “Speaking to the experts gives you the confidence to do your due diligence, research your strategy and really make a difference to your future, both business and personal. I would encourage any business owners to get in touch with The Landlord’s Pension and find out about the property SSAS pension from the experts”.