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.
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 guides on SSAS Pensions:
- SSAS vs SIPP pensions
- What is a Self-Administered Pension?
- How To Set Up A SSAS pension
- What kind of regulations and protections are there for SSAS?
- What Can an SSAS Pension Invest In?
- What are SSAS death benefits
- HMRC Rules
Still unsure about something? Please don’t hesitate to contact us about enquiries relating to pensions and investments in property.
What our customers say...
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 moreNick Clement
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
You get nothing but the best advice to use your pension in the correct manner. Setting up a SASS is not as daunting as one would think, it is the best thing I ever did. Being introduced to the Dolphin scheme to make my pension work hard was a no... Read moreSelwyn Browne
Massive thanks to Laura and Teresa in helping set up the SASS. Great communications throughout and always on hand to answer queries.We are just about to embark on the investment side of things now the pensions have been transferred into the SASS and the range of investment opportunities give me... Read moreDamian Spencer
I've had a small pension pot with Landlord Pension for the last couple of years. There were two major reasons why I made my choice. Firstly fees. Secondly, I wanted to be hands off (as much as one can be) - working professionally within compliance and anti-fraud - segregation of... Read moreSylvia Snowling
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