What is a SSAS Pension?

A Small Self-Administered Scheme (SSAS) pension is a type of UK pension in the form of a tax-efficient scheme, exclusively for business owners. By switching to a SSAS you can take control of your pension funds and invest them at your own discretion, in your business and property.

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A SSAS (Small Self Administered Scheme) is a type of Occupational Pension Scheme with several advantages. We are often asked, what are the benefits of a SSAS pension and the answer is extensive. As well as the same benefits traditional pension offer, a SSAS has much more control and flexibility to allow you to achieve your aims and goals, including increased investment choice and power, tax efficiency, business and pension alignment and much more.

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 is the right option for you.

Why start a Small Self-Administered Scheme pension (SSAS)?

A 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 a SSAS. A small number of family members may also join an established SSAS.

Members of a SSAS have more control over investment decisions than is usual for pension schemes. It is possible to invest wisely and make a significant return on your investment.

What makes a SSAS an attractive option?

One of the most attractive USPs for many investors is the ability to take out a loan from a 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.

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