What is a SSAS?
A Small Self Administered Scheme (SSAS) is a trust based occupational pension scheme created by a limited company usually for its directors, and senior employees and in some cases, their family members. It can have a maximum of 11 Members and operates on a money purchase (or “defined contribution”) basis.
A SSAS will generally have a much wider scope of permitted investments than a platform based pension and in particular can assist businesses through loans to the employer business or by purchasing commercial property leased to the business.
To obtain exemptions for complex pension legislation and to reduce administrative burdens, each Member should be appointed as Trustee and in that capacity will have control and flexibility over the scheme’s assets and pension investments. The scheme should also have an independent Trustee whose role is to ensure that the scheme is run in accordance with legislative and regulatory guidelines. All Trustee decisions should be unanimous.
A SSAS will be registered with HM Revenue and Customs (HMRC) and as such will benefit from the following tax reliefs:
- Company and personal pension contributions are deductible against corporation and income tax respectively.
- No income tax payable on allowable investments.
- No capital gains tax payable on disposal of investments.
- A tax free lump sum on retirement.
- Benefits on death before age 75 payable in the form of a pension or a lump sum free of tax*.
*Up to permitted maximums.
Each SSAS should have a Scheme Administrator. This is an official designated function and carries reporting and other responsibilities. We recommend that the Trustees collectively should fulfil this role and we can act as a joint Scheme Administrator, if this is required, as this can make filing returns with HMRC more efficient.