About SSAS

A SSAS is a specific type of occupational pension scheme designed to give members the maximum possible control over their pension scheme and its investments. It must be set up by a company (the ‘sponsoring employer’) and is particularly suitable for directors of private companies as these individuals also act as the scheme trustees. This allows directors to retain full control over investment decisions and, if they wish, to use their pension fund to make a loanback to the business and/or invest in commercial property that can be let to the company.

Who Sets Up

And Runs a SSAS?

A SSAS is set up as a trust by the sponsoring employer. The sponsoring employer then appoints the trustees (usually, the directors of the sponsoring employer) and the Scheme Administrator.

The trustees are responsible for operating the SSAS in accordance with the scheme’s trust deed and rules for complying with the relevant HMRC, regulatory and statutory requirements. These are wide-ranging requirements with potential tax consequences, so SSAS trustees will usually appoint a specialist SSAS firm, like Vintage SSAS Services, to assist them in carrying out their duties.

A SSAS is required to have a Scheme Administrator, usually a UK resident individual or company, who is responsible for ensuring compliance with the HMRC requirements.

SSASs are not regulated by the Financial Conduct Authority but they are regulated by The Pensions Regulator.

Who Can

Join a SSAS?

SSAS membership is normally restricted to the owner directors of the sponsoring employer and members of their families who are employed by the company. All the SSAS members will also be trustees of the SSAS.

Who Owns The

SSAS Assets?

The SSAS trustees are the legal owners of the scheme’s investments and they hold these investments for the benefit of the members.

The contributions or transfers for SSAS members can be invested in specific assets for their benefit. Alternatively, they can be invested jointly and apportioned between all the members on a pro-rata basis.

What Are The

Benefits of a SSAS?

A SSAS benefits from the same tax advantages as all registered pension schemes. In addition, it offers the members full control and the option to invest in a broader range of investments than other mainstream pension products.

It also allows members of a family to pool their pension investments into a single fund, allowing wider investment options than might be available if the pension funds were kept separate.

A unique and important feature of a SSAS is the ability to lend some of the pension fund back to the company that set up the scheme in the form of a loanback. This allows the company to make pension contributions and benefit from tax relief without reducing its liquidity.

Another key benefit of a SSAS is the option to invest in commercial property that can be let to the company.

Under ‘flexi-access drawdown’, a SSAS member can take a tax-free lump sum at any time from age 55, continue to control their pension investments and withdraw whatever amounts of income they want whenever they wish to do so. (Subject to income tax)

The key tax advantages of a SSAS are:

Reduced corporation tax liability – employer contributions to a SSAS are normally treated as an allowable expense for corporation tax purposes.
The pension scheme’s investment income and capital gains are generally exempt from UK income and capital gains taxes.
The benefits payable if a member dies are normally free from inheritance tax; furthermore, there is normally no tax payable on the death benefits if a member dies before age 75.

What is the difference

Between a SSAS and a SIPP?

Both SSASs and SIPPs (self-invested personal pensions) are designed to give their members more control over how their pension fund is invested and more flexibility over drawing benefits. However, there are some key differences between them, which we have outlined in the table below.

SSAS

Structured as an occupational pension scheme.

Regulated by The Pensions Regulator.

Each scheme has its own standalone trust; the members are the trustees.

Generally designed for the directors of private companies who require maximum control and flexibility.

The member trustees are in full control of their pension investments.

SSASs can, subject to conditions, make a loan of up to 50% of the scheme’s net assets to the sponsoring employer.

SIPP

Structured as a personal pension scheme.

Regulated by the Financial Conduct Authority.

All the members participate in a single large trust; the SIPP provider is usually the trustee.

Generally designed for individuals who do not have their own company and want control over their pension investments.

The SIPP provider is in control and decides which investments to allow.

Loans are not allowed to the members or any person or company related to the member.