Employers can make one-off or regular pension contributions to their SSAS at their discretion, and these should be eligible for tax relief, subject to certain conditions.
The maximum total contributions for an individual member to all pension schemes (including those from their employer) that will be eligible for tax relief against their income from employment or self-employment in any tax year is the Annual Allowance for that year. This is currently £40,000 in the tax year 2021/2022.
High earning individuals may have their own annual allowance reduced on a tapered basis depending upon their total income in a tax year.
Individual members who have been a member of a registered pension scheme can carry forward any unused Annual Allowance potentially from the three previous tax years.
Members can also make personal contributions to a SSAS, but WestBridge do not operate a Relief at Source tax reclamation service. The member would therefore be responsible for making their own application for tax relief via their personal tax assessment on any gross contribution made by them.
There are other conditions that it is important to be aware of, include the following:
- Individuals who have drawn income under flexi access drawdown will have triggered the Money Purchase Annual Allowance. This is a reduced annual allowance of only £4,000p.a. in the 2021/2022 tax year.
- The ability to carry forward unused allowances from previous tax years is not available for individuals who triggered their Money Purchase Annual Allowance.
- If a member has any Lifetime Allowance protection, then this may be lost if any contributions are made to the SSAS, or to any other pension arrangements, by the employer or by the member.
Please note In-specie contributions are not able to be facilitated into a Westbridge SSAS.
Members can normally transfer benefits from other registered pension schemes into their SSAS, which can accept both cash and in-specie asset transfers.
Before any transfer, it is important for the member to consider the benefits available from the ceding scheme that they would be giving up and any costs and charges associated with the transfer.
The new transfer regulations which became effective from November 2021 require the ceding scheme to undertake due diligence on the receiving SSAS to satisfy themselves that transfer is not to a scheme facilitating a scam. As a result, transfers to SSAS can sometimes take several months and may involve additional due diligence requirements of the ceding scheme that are outside the control of the SSAS administrator. Consideration should be given to where the transferring funds are invested during this period.
Whilst we would always recommend that an individual member should seek professional regulated advice on any transfer or pension entitlement, for certain transfers, including those for defined benefit schemes or those holding other safeguarded rights, advice is compulsory.