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SSAS Pension explained
What is a SSAS Pension?
A Small Self-Administered Scheme (SSAS) is a defined contribution pension tailored for small business owners, family-run businesses, and company directors. With a maximum of 11 members, a SSAS offers unique investment flexibility and tax advantages, making it a strategic asset for business growth and retirement planning. SSAS trustees have direct control over investments, empowering them to align retirement goals closely with the business’s financial health and growth objectives.
What are the benefits of a SSAS Pension?
A SSAS pension puts investment control in the hands of business owners and company directors. Unlike traditional pension schemes, a SSAS is self-administered, allowing trustees to manage contributions and investments directly. This independence provides the flexibility to craft investments that meet both business expansion needs and personal retirement goals. With tax-deductible contributions and tax-efficient withdrawals, a SSAS provides a blend of investment control and tax efficiency tailored to a business-savvy audience.
SSAS Pension Tax Efficiency Explained
SSAS pensions offer substantial tax benefits, such as Corporation Tax relief on business contributions and Income Tax relief on personal contributions. Furthermore, assets held within a SSAS can grow tax-free, with no Capital Gains Tax or Income Tax, allowing pension savings to accumulate more efficiently. Rental income from commercial properties within the SSAS is also tax-free, enhancing the pension fund’s long-term growth and making it a highly tax-efficient tool for business owners.
Using SSAS for Property Investment
A significant advantage of a SSAS pension is its ability to hold commercial property investments, allowing businesses to use pension funds to secure essential spaces like offices, industrial sites, or storage facilities. Not only does this provide tax-free rental income, but the property’s appreciation also strengthens the fund. For business owners leasing property from their SSAS, this structure enables them to secure real estate that directly supports business operations while enhancing their retirement savings.
How SSAS Pensions Support Property Ownership Through Pooled Assets
A distinctive feature of SSAS pensions is the ability for members to pool their pension assets to fund larger property investments. By combining resources, SSAS members can acquire high-value commercial properties that may be individually out of reach, creating opportunities for tax-free rental income and capital growth. Pooling assets enables business owners to share in valuable property investments that diversify their pension portfolio, adding a level of long-term security and growth potential.
Pension consolidation
As well as contributions, a SSAS can receive transfers in from other pension schemes. You should think carefully though before transferring existing pensions into a SSAS. It is important that you get regulated financial advice to ensure that you do not lose any entitlements. This is especially important if you have a Final Salary Pension Scheme (often referred to as a defined benefit scheme).
Work with a SSAS specialist
While SSAS pensions offer flexibility and tax benefits, they do require trustees to navigate HMRC regulations and take on active administrative roles. Some business owners may find these responsibilities challenging, particularly as managing a SSAS involves compliance to maintain its tax advantages. Before establishing a SSAS, business owners should evaluate the setup and management requirements carefully, often with the assistance of a professional trustee or SSAS practitioner.
Learn more about SSAS
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