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

The Lifetime Business Tax Plan is made up of two components; an Investment Trust Fund and a Small Self-Administered Scheme (SSAS) both of which are only available to company directors. 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.

• An Investment Trust Fund is recognised by HMRC as a form of Family Investment Company, which is 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.

An Investment Trust Fund is recognised by HMRC as a form of Family Investment Company, which is a standard way of preserving family assets for future generations whilst mitigating any tax. As a special type of subsidiary or standalone company, this gives you the power to invest your company profits and surplus cash in property, stocks, and/or many other asset classes. An Investment Trust Fund has a high street bank account, similar to your current business account, and from this account you then control how the money is invested.

Put simply, Business Property Relief is a tax relief for business owners, relating to assets such as business premises, shares, machinery, other property and more. This relief is in place to reduce the amount of inheritance tax due on business assets. Like anything tax related, there are complications and rules, dependent upon your individual business and situation. Complex understanding is required but with the right support, this can be taken advantage of, and other strategies and tools can be used in alignment with this understanding. By claiming business property relief, you are essentially reducing the value of the assets for inheritance purposes in line with HMRC rules.

The difference between a trading company and an investment company is fairly straightforward in the eyes of HMRC. A trading company must not use its surplus cash for investment purposes whereas the business of a trading company consists of income made, mostly in making investments. To determine whether your company is a trading company or an investment company, you can apply a series of 20% tests. The tests determine whether the cash held within your company represents more than 20% of the balance sheet, or more than 20% of the turnover or even the profit. HMRC have been known to win first tier tax tribunals as a result of the directors investing more than 20% of their time managing investments. An example of this could be where a director has a share dealing account and spends much of their time managing this rather than focussing on the trade of the company. You can read more in our guide

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

Surplus company cash is the amount of cash held by your company that exceeds the amount that is required for day-to-day trading operations of your company. It is extremely important to constantly evaluate surplus company cash and how you use it as if used in an investment capacity or even if just held dormant, it is subject to HMRC tax liabilities.

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

• Commercial property
• Hands-free property investment
• Your own business
• Stocks and shares
• Property development loans
• Property Crowdfunding

And much, much more

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 and Inheritance Tax
• 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, away from creditors and with ultimate tax efficiency
• A SSAS can invest in property crowdfunding and other hands-free 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
• A SSAS is a trust and protects your legacy

Click to download a beginner’s guide

No. The SSAS has been around for over 40 years. It was designed by HMRC, exclusively for company directors to give them more control over their pensions and support businesses.

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, loan to your business, start property crowdfunding and much more.

TLP 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 free, no-obligation consultation 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. A SSAS can also invest in property crowdfunding. 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.

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.

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 – https://thelandlordspension.co.uk/ssas-pension-regulations/

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.

A SSAS does not legally have to have Professional Trustee, but each SSAS does require a Scheme Administrator (the administrator is an official role required by HMRC for Registered Pension Schemes).

When setting up a SSAS with TLP, we strongly advise having a Professional Trustee. Specialist knowledge of pensions and tax is important to ensure the SSAS is administered correctly and in accordance with HMRC requirements and legislation.

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 enquiries@thelandlordspension.co.uk

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