Transform your Tax Strategy in 2025

As the 2025/26 tax year approaches, business owners face a shifting tax landscape with rising costs and new regulations. Amid these changes, the Small Self-Administered Scheme (SSAS) and Family Investment Company (FIC) remain as two of the most powerful tools for tax efficiency, wealth management and succession planning.

Here is how you can strategically use these tools to optimise your tax position and grow your wealth this year.

Why SSAS Pensions are a Game Changer in 2025

A Small Self-Administered Scheme is a highly flexible tax-efficient vehicle, specifically designed for business owners. It offers unique advantages that go beyond traditional pensions:

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Tax relief on contributions: Contributions made by your company to a SSAS are deductible against Corporation Tax. For example, contributing £60,000 could save up to £15,000 in Corporation Tax this year.

Flexible Investments: SSAS allows investments in diverse assets, including commercial property, stocks, bonds, and even loans back to your business. This flexibility enables you to align pension contributions with your business growth strategy.

Loanback Feature: A SSAS can lend up to 50% of its net assets back to your company, providing a cost-effective way to fund expansions or manage cash flow without relying on external financing. This strategy can be repeatedly applied, with each cycle leveraging increased capital from the previous cycle’s success.

Inter-generational Wealth Planning: You can add family members to the SSAS, giving them access to its many benefits whilst also providing effective, straightforward, and profitable legacy and succession planning.

2025 TIP:

Use the loanback feature strategically to inject cash into your business whilst simultaneously growing your pension fund. Setting a higher interest rate, rather than opting for a lower rate, on the loanback can accelerate fund growth. Additionally, consider adding family members as trustees to maximise annual contribution allowances.

The Family Investment Company (FIC): A Long-Term Wealth Management Tool

Family Investment Companies are corporate structures designed to manage assets in a tax-efficient manner. They provide substantial advantages for business owners seeking to oversee investments and plan for succession:

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Inheritance Tax (IHT) Mitigation: By transferring shares in the FIC to family members, you can ensure the company and its assets are passed down to future generations. This approach enables long-term management of investments as well as fostering continuity and generational wealth preservation.

Tax-Efficient Dividends: Dividends received by the FIC are typically exempt from Corporation Tax. This allows you to reinvest profits within the company at lower tax rates compared to personal income taxes.

Control over Wealth Distribution: As the director, you retain total control over decisions made regarding the FIC. Family members cannot dictate on decisions about investments and assets. Funds and assets can be moved both in and out of the FIC.

2025 TIP:

Use FICs to take advantage of Business Property Relief (BPR) and shield investment income from higher personal income tax rates. Reinvest profits within the FIC at the corporation tax rate (25%), preserving assets to reduce Inheritance Tax.

How Business Owners can Maximise these Tools in 2025

Combine Strategies for Maximum Tax Efficiency:

Use a SSAS for immediate Corporation Tax relief on contributions. Channel retained earnings into a FIC for long-term investment growth at lower corporate tax rates.

Plan for Succession:

Add family members to your SSAS or distribute assets in your FIC. This ensures smooth intergenerational wealth transfer whilst minimising Inheritance Tax.

Invest in Commercial Property:

Purchase commercial property through your SSAS or FIC. Rent paid by your business can grow either the pension fund or company assets while being deductible as a business expense.

Seek Professional Advice:

Both SSAS and FIC require careful structuring to comply with HMRC and The Pension Regulator rules and regulations and optimise the benefits. Work with experts, such as TLPI, to tailor these tools to your unique needs.

In 2025, navigating rising taxes and economic pressures requires proactive planning. Small Self-Administered Schemes and Family Investment Companies offer unparalleled flexibility and efficiency for business owners looking to secure their financial future whilst reducing their tax liabilities. By leveraging these tools strategically, you can not only safeguard your wealth but also position your business for sustained growth.

TLPI has the experience and expertise to understand your personal goals and strategies, and create a bespoke and personal product that affords you maximum flexibility.

Contact TLPI today to kick off the 2025/26 tax planning year in the right way and get started on your tax planning journey.

Book a free overview of your situation

Transform your Tax Strategy in 2025