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What is an SSAS pension?

A comprehensive guide to Pensions and Investments for Investing in Property

Are you looking for options to invest for the future? An SSAS (Small Self Administered Scheme) is a type of Occupational Pension Scheme with several advantages.

This type of scheme is an attractive option for investors and business owners because it can be tax-exempt. This includes Capital Gains Tax, so investments in property can generate substantial returns. Contributions to the SSAS also receive tax relief (provided some conditions are met). On this page, we will delve into what SSAS is and how to determine if it’s the right option for you.

What is a Small Self Administered Scheme?
An SSAS, properly managed, is a tax-efficient retirement plan. In the past, SSAS were set up by directors of limited companies for the benefit of specific employees. Since pension simplification, Partnerships and Families have also been allowed to start an SSAS. A small number of family members may also join an established SSAS.Members of an SSAS have more control over investment decisions than is usual for pension schemes. It’s possible to invest wisely and make a significant return on your investment.
Who Can Start an SSAS?

An SSAS is trust-based. This means that it is run by a trustee for the benefit of the beneficiaries. In the past, it was necessary to employ a professional trustee. A professional trustee, known as a pensioner trustee, makes sure that the SSAS follows regulations laid out by HMRC.

Nowadays, it’s possible for a member of the SSAS to act as the trustee. This is known as a member trustee.

Much like a traditional pension, an SSAS pension can be invested in various areas, including shares, commodities, corporate bonds and gilts providing investors with a rather attractive array of sources for their pension returns.

What makes an SSAS an attractive option

One of the most attractive USPs for many investors is the ability to take out a loan from an SSAS which can be injected into their limited company for justifiable purposes. However, there are strict rules on how these loans can be administered. These pension loan rules are set and stipulated by the HMRC.

  • The maximum loan term is five years

  • Interest charged on the loan must be at least 1% above the average base lending rate

  • The loan must be secured as a first charge against an asset (or assets) of at least equal value to the loan, plus the loan interest

  • The loan cannot be more than 50% of the net value of the scheme assets

  • Repayment of the loan must be made in equal annual instalments.

If you’d like to invest in property, there are advantages to doing this via an SSAS. As mentioned earlier, a properly managed SSAS is tax exempt, so you do not have to pay capital gains tax.

Coupled with the ability and flexibility to invest in property crowdfunding and loan note property bonds, an SSAS makes for an even more appealing option. The terms of these types of property investments are between one and five years, with a return of between 6% and 12% per annum.

Need specific pension investment advice?

Read our SSAS Pension guides:

Still unsure about something? Please don’t hesitate to contact us about enquiries relating to pensions and investments in property.

What our customers say...

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  • positive review We had a number of workplace and final salary pensions, dotted all over the place and decided to pull them all into one SSAS. Laura and the team were excellent in explaining what to expect and keeping us advised every step of the way, in fact as part of... Read more

    Rosemary Wooding Avatar
    Rosemary Wooding
    7/18/2019

  • positive review Mike Holt and his team have been awesome getting my SSAS set up. All ready to go in record time and looking forward to building the pension pot, tax-free!

    Jeroen Hoppe Avatar
    Jeroen Hoppe
    4/22/2019

  • positive review Really professional company.
    I’ve pointed a few clients their way that want to release ‘dead’ money from their pensions to invest in higher returns.
    Gareth really knows his stuff and Teresa is super efficient.

    Nick Carlile Avatar
    Nick Carlile
    3/29/2019

  • positive review Genuine professional people delivering top notch quality customer service accompanied with the all important experience and in-depth knowledge of this business field.
    Many thanks in particular to Gareth and Teresa for their unswerving support advice and guidance over these past few years since I took up the challenge of looking after...     Read more

    Nick Clement Avatar
    Nick Clement
    3/06/2019

  • positive review From the very beginning of the journey to re gain control of my pension and earn higher interest, the landlords pension were and still are extremely professional, they made the whole process very easy and explained the whole process. BRILLIANT 5 star service and 2 years on and all is good.

    Ben Garner Avatar
    Ben Garner
    1/10/2019
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The Landlord’s Pension is an expert in this niche sector of financial planning and have been helping clients to invest in property since 2004