Frequently asked questions

A Small Self-Administered Scheme (SSAS) pension is a flexible business tool that saves you tax, funds your business, and allows you to invest at the discretion of scheme members. A SSAS is an extremely powerful element of many Lifetime Business Tax Plans, or as a standalone tool.

Lifetime Business Tax Plans are packaged solutions, exclusively for company directors, that enables them to save tax, grow funds and solve multiple problems for their business.

To find out more about SSAS, investments a SSAS can make, SSAS regulation and more about TLPI’s full SSAS service, please click on the SSAS frequently asked questions below.

A comprehensive guide to Tax Planning, Pensions, Investments, Property and Wealth Protection

What is a SSAS?

A SSAS is 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

What is SSAS Practitioner?

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…

How can I invest my SSAS pension money?

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 or loan to your business.

TLPI 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 call at a time to suit you, please Click here.

Guide to The Lifetime Business Tax Plan

What are Lifetime Business Tax Plans?

Lifetime Business Tax Plans are packaged solutions, exclusively for company directors, giving them the control and flexibility 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

Lifetime Business Tax Plans are powerful plans for business owners. They encompass two major components; the Family Investment Company and the Small Self-Administered Scheme (SSAS). 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.

Lifetime Business Tax Plans

What are Lifetime Business Tax Plans?

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

Lifetime Business Tax Plans encompass two major components; the Family Investment Company and the Small Self-Administered Scheme (SSAS). 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.

Do HMRC recognise Lifetime Business Tax Plans?

Yes, because legislation has created the components.

  • The Family Investment Company is recognised by HMRC as 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.

What is a Family Investment Company?

Recognised by HMRC, a Family Investment Company 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 Family Investment Company has a high street bank account, similar to your current business account, and from this account you then control how the money is invested.

What is Business Property Relief?

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.

What is the difference between a trading company and an investment company?

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

What is the 20% rule in relation to Business Property Relief?

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 

What constitutes surplus company cash?

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.

What can a Lifetime Business Tax Plan invest in?

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

And much, much more

SSAS basics

What does SSAS stand for?

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.

What is a SSAS?

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

Who is a SSAS for/who can have a SSAS?

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.

Can I pay SSAS costs and fees from the SSAS scheme?

Yes. Fees and costs can be paid by the SSAS or by the company.

What are the tax benefits of a SSAS?

  • 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 has decreased Inheritance Tax liabilities
  • 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.

Are there any drawbacks to a SSAS pension?

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.

How long does it take to set up a SSAS?

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.

Can I set up a SSAS as a family scheme?

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.

What is the difference between a SSAS and a SIPP?

  • 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…

What can you use a SSAS for?

  • 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 3rd 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 hands-free property investments.

Why should I have a SSAS?

  • 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

Is the SSAS a new type of pension?

No. The SSAS has been around since 1973. It was created exclusively for company directors as a corporate pension that is fully compliant with HMRC and The Pension Regulator rules and regulations.

Running a SSAS

Can other people join my SSAS?

You are able to invite up to 10 additional members to the scheme. Members can include other company directors or employees or family members.

Do all members have an equal share of the SSAS pension pot?

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 Investments

How can I invest my SSAS pension money?

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 or loan to your business.

TLPI 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 call at a time to suit you, please Click here.

Can a SSAS purchase commercial property?

Yes. A privilege of a SSAS pension is that it can invest in commercial property. Read more…

Can a SSAS purchase residential property?

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. Read more…

Can I make loans to other people using my SSAS?

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.

How much can I loan to my company from my SSAS?

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.

SSAS contributions and pension transfers

Can I transfer my existing personal and workplace pensions into a SSAS?

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.

How do I make other contributions to a SSAS pension?

Contributions can be paid in as a lump sum or regular contributions. Employer contributions can also be made.

Can I combine multiple pensions into one SSAS pension?

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.

Can other members of the SSAS transfer their pensions to the scheme?

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.

SSAS rules and regulations

Who regulates SSAS pensions?

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…

Where can I learn more about SSAS pension rules?

SSAS pensions are regulated by HMRC & The Pensions Regulator.

Visit HMRC

Visit The Pensions Regulator

You can also read more here

Roles within a SSAS

What is SSAS Practitioner?

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…

What is the role of the Scheme Administrator?

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.

Does a SSAS need a Professional Trustee & Scheme Administrator?

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.

Other questions

How can I find out if I am eligible for a SSAS?

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@tlpi.co.uk

I want to speak to someone about SSAS pensions

Book a free call with one of our expert consultants today here.

Alternatively, take our 60 second eligibility test to find out

DO I QUALIFY?

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