SSAS Overview: Everything You Need to Know

A Small Self-Administered Scheme (SSAS) is a type of occupational pension scheme in the UK, primarily used by business owners, directors, and key employees. It offers a high degree of investment flexibility and control over pension assets.

A SSAS can be set up by limited companies, partnerships, or LLPs for the benefit of company directors and employees. It typically requires a corporate sponsor and a small number of members, often up to 11.

SSASs offer tax relief on contributions, tax-free growth within the scheme, and flexible investment options, including the ability to purchase commercial property and lend funds to the sponsoring company. They are also effective tools for succession and estate planning.

Contributions to a SSAS are subject to the Annual Allowance, which is typically £60,000 per tax year (2024/25). Contributions exceeding this limit may incur tax charges, though unused allowance from previous years can be carried forward.

Yes, a SSAS can lend up to 50% of its net asset value to the sponsoring company. This can provide valuable funding for business expansion or cash flow, but the loan must be secured, and repayment terms must comply with HMRC regulations.

SSASs can invest in a wide range of assets, including commercial property, stocks and shares, unquoted company shares, unit trusts, and even make loans to the sponsoring company. They cannot, however, invest in residential property or personal assets.

Yes, a SSAS can be used to purchase commercial property, such as offices, warehouses, or retail units. The property can be leased back to the sponsoring business at a market rate, generating rental income for the pension fund.

Contributions to a SSAS receive tax relief, investment growth is free from Capital Gains Tax, and there are no taxes on rental income or dividends earned within the scheme. Additionally, SSAS assets are usually outside of the member’s estate for Inheritance Tax purposes.

While both SSAS and SIPPs (Self-Invested Personal Pensions) offer control over investment choices, a SSAS is specifically designed for businesses and allows for features like loans to the sponsoring company and multiple member participation, which are not available with SIPPs.

Yes, most types of pensions, including SIPPs and defined contribution schemes, can be transferred into a SSAS. This can help consolidate pension assets into one scheme, providing greater control and investment flexibility.

The main risks include potential loss of capital from poor investment choices, compliance risks due to complex regulations, and the possibility of penalties if HMRC rules are breached. Proper management and professional advice are essential to mitigate these risks.

Like other pension schemes, SSAS members can access their pension benefits from age 55 (rising to 57 in 2028). Early access may be possible in cases of ill health but is generally subject to significant tax penalties.

A SSAS is managed by trustees, who are typically the members of the scheme. It requires careful administration, including regular reporting to HMRC and compliance with pension regulations. Many businesses opt to use professional SSAS administrators to handle these responsibilities.