The Family SSAS

Flexible, tax efficient family trust

The Family SSAS is a fantastic way to ensure ultimate inheritance planning and tax efficiency. If the plan is to build the legacy, then a SSAS is a fantastic tool, for accruing assets and securing them for future generations.

Protecting family businesses and securing family wealth in a tax efficient wrapper.

Family SSAS pension

What is a Family SSAS?

A Family SSAS is a family pension trust, independently established for the benefit of its members. Members of the trust can be family members or also company members. The SSAS is a corporate pension and so regulated by HMRC and The Pensions Regulator, enjoying the same benefits as traditional benefits, plus much more. The Family SSAS pension is controlled by its members and so all investment decisions are at the discretion of the members of the SSAS. In the case of the Family SSAS, this means that the family is responsible for the fund and how the funds are invested. It also means that family assets, such as property and land, can be secured within the SSAS to ensure a legacy for generations to come. For families and small businesses, the Family SSAS is the ideal vehicle for wealth protection and succession purposes, as well as ensuring that inheritance tax is minimised.

Family SSAS pension

How does a Family SSAS work?

A Family SSAS must initially be established by a company director and registered with HMRC. Once established, other family members or key company employees may also be invited to join the trust, making it the perfect tool for family run businesses. The Family SSAS may have up to 11 members, who may also transfer in their pension funds if they wish to, creating a larger pooled pot. Members retain the percentage portion of the pot that they put in, as the pot grows. Funds may be invested at the discretion of the members.

Leaving a legacy

Flexibility & control

The Family SSAS is a unique and flexible pension with a very wide range of investment choices. Examples of popular Family SSAS investments include: the family business, commercial property, land, indirectly in residential property, property crowdfunding, unquoted shares, gilts and bonds, and a much wider range of investment than usually available within traditional pension funds.

The Family SSAS is an asset that can be passed down through the generations and wealth secured. As a pension trust, it is legally protected from creditors. Therefore, it is the ideal way to ring-fence assets for family succession and inheritance.

Couple looking at laptop

What does a Family SSAS mean for you?

  • Much more flexibility & control than the traditional pension and retirement planning methods
  • Members retain their own portion of the fund and nominate their own beneficiaries
  • Assets can be secured within the Family SSAS, which means they are outside of the estate for inheritance purposes and ring-fenced from creditors
  • Unlike traditional pensions, the Family SSAS can be passed down through the generations
  • All in one trust for investment, security and succession purposes, making it easier to manage and more tax efficient, with increasing growth opportunity and reach
  • For family businesses, this adds additional security, flexibility and continuity possibilities, supporting the business as well as the family and member retirement plans
  • Cheaper, faster and simpler to manage ownership, transferal, and inheritance
  • Control over investment choices, which is beneficial both to the family and the business
  • The Family SSAS can invest in property, transfer assets and sell assets. This is particularly useful in the case of family businesses, property and land investment and ownership
  • Offers the ability to pool pensions for greater investment choice and reach, increased growth potential for all members and still all with in a tax efficient wrapper when it comes to succession and inheritance

Put simply, the Family SSAS is a unique, tax efficient wrapper that protects your family wealth, allows you to create a robust succession plan for your family business and can benefit your family for many generations to come.

What happens when a Family SSAS member retires?

Should a member of the SSAS retire, their retirement savings within the SSAS can provide the same retirement options as traditional pensions, for example, take a 25% lump sum, secure and income or receive an income from the fund or even choose a combinations of these. Income that is generated by investments the fund has made (for example rent it is receiving from property) can be paid to the retired member as benefits and assets left within the fund. Due to the flexibility of the SSAS, the member can delay retirement or take retirement early, taking income from the fund at the same time as taking a portion of their pension, for example if they continue to work part time.

What happens when a Family SSAS member dies?

The SSAS is an asset that can be handed down through the generations. If a SSAS member dies, beneficiaries can quickly and easily receive benefits and assets. With very few exceptions, there is no inheritance tax as the SSAS is not part of the estate, but a pension. The fund can continue to be held and passed down through the generations, as long as the funds last.

A successful SSAS with long-term investments and strategies can last for many generations, providing valuable benefits and securing assets.  Beneficiaries are immediately entitled to draw benefits, regardless of age.

Read more about SSAS death benefits here.

What does a Family SSAS mean for your Family business?

For family businesses, the Family SSAS is the ideal vehicle for ensuring business continuity. Not only does it ring-fence and protect assets within the scheme, it means that a business can be handed down through the generations, avoiding extensive legal fees and arduous paperwork. As part of a long-term strategy, succession planning can include a straight-forward exit plan for older generations as the younger generations move into key positions. Retired members of the family business can continue to live the lifestyle that they desire by using flexible strategies to pay benefits from the SSAS, whilst keeping key assets retained within the scheme. This allows the Family SSAS to continue to grow and continuity to be optimised.

Building a legacy using a Family SSAS

With a successful strategy, a Family SSAS can keep growing and providing benefits for many generations. It is a facility to hand-down wealth and assets as well as ensure smooth continuation of the family company. As long as there are funds within the SSAS, it can continue to be passed down through the family. Beneficiaries nominated within the SSAS are entitled to draw benefits straight away, should a member die. They do not need to wait until they are at least 55. A SSAS is a great way to ensure ultimate inheritance planning and tax efficiency. If the plan is to build the legacy, then a SSAS is a fantastic too, for accruing assets and securing them for future generations.

Saving tax with a Family SSAS

As the SSAS is a family trust, beneficiaries of the trust can be nominated to receive the fund upon death of a member. Generally, as a pension, these benefits are free of Inheritance tax. In addition, The Family SSAS avoids the paperwork and legal fees and inheritance tax often incurred as assets are handed down. For a business, assets and funds can be invested at the discretion of the trust members, meaning a tax efficient strategy can be employed, both when growing the fund and also when handing-down through the generations. In addition, The Family SSAS is a useful tool for business strategy and planning, ensuring that tax efficiency is optimised throughout.

An example of an efficient Family SSAS strategy:

Couple leaving their family business to sons
John and his wife Jean run a company.
They have 2 sons, Tom and Tim.
They want to plan for their retirement and when Tim and Tom will take over the business.
John and Jean decide to sell their business premises to their SSAS.
They pay rent from their business, to the SSAS, for use of the premises. The rent they pay is an allowed business expense and so afforded tax benefits. Income received by the SSAS is free from income tax and so the SSAS grows.
Due to having to pay rent, the company reduces profit, so also reduces the year end tax bill.
All of the funds and the assets still belong to the business and/or the SSAS, so all remain within the family. Payments being made from one family asset, the business, grow another family asset, the Family SSAS.
Tim and Tom are invited to join the SSAS. This means that should John or Jean die, as beneficiaries they will take ownership of John and Jean’s share of the SSAS, avoiding inheritance tax and legal costs and fees.
John and Jean decide to retire early.
They are entitled to draw 25% of their pension fund tax free but they decide to spread this out over a few years, to optimise tax efficiency and leave more funds within the SSAS.
Rent received by the SSAS provides cashflow for the payment of John and Jean’s retirement benefits, should that be required.
John and Jean are no longer receiving wages from the company. Therefore, the company decides to use that cash to pay additional contributions into the SSAS on Tim and Tom’s behalf, to grow the fund.
As John and Jean continue to receive their benefits from the fund, their share of the fund reduces. However, Tom and Tim’s share of the fund is increasing due to the pension contributions and the growth of the SSAS.
The value of the company premises increases and adds value to the SSAS pot. If the company decides to sell the property, it will be free from capital gains tax.
As Tom and Tim grow older, they invite the next generation to join the SSAS and the cycle continues.

This is just one example of how the Family SSAS can be used for succession planning, whilst still providing retirement benefits and business growth.

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