Gibbs Denley specialise in providing Small Self-Administered Schemes, which are ideal for many businesses and partnerships as a flexible and tax-efficient pension solution with a low set-up cost.
What is a Small Self-Administered Scheme (SSAS)?
SSASs are a type of pension that can be set up with between 1 and 12 members, through a trust by the directors of limited companies for themselves, senior executives and selected employees, though they can also include family members, even if they are not employees. The trust is issued and administered by Gibbs Denley Pension Trustees Ltd on behalf of the trustees and members.
Unlike more traditional pension solutions, a SSAS puts you in charge and can own commercial property or other assets, or loan money back to the business – subject to security provisions.
What are the benefits of a SSAS?
- Low Costs – There is one single set of charges regardless of how many scheme members there are, reducing the cost of administering the pension.
- Transfers – Funds from other pension arrangements can be put into a SSAS, as can contributions from the company or a member attracting tax relief.
- Tax efficiency – Not only do employer and member contributions receive tax relief at the appropriate rate, investment income and gains within the scheme (apart from some dividend income) are generally exempt from Income Tax and Capital Gains Tax.
- Investments – You can invest the funds within a SSAS into stock and shares style investments in line with your scheme’s attitude to risk.
- Flexible – It offers your business greater flexibility on where the scheme’s assets can be invested. For example, you may be able to purchase a trading premises and rent it back to the business, paying the rental income into the scheme (subject to conditions).
- Borrowing – The SSAS can borrow money for investment. For example, the SSAS may raise a mortgage to assist with the purchase of the company premises by the scheme and the mortgage repayments may be covered by the rental income the company pays into the SSAS
- Lending – SSASs can loan money to the company to buy company assets or property. The loan would then be repaid to the scheme on a 5-year capital and interest basis.
- Lease – It is possible for the scheme to purchase capital equipment which can then be leased back to the company to provide an income for the SSAS, subject to conditions.
- Flexible Retirement Benefits – SSAS members have a variety of flexible options available for taking benefits from the scheme when they retire, including tax free cash, flexible income drawdown or annuity purchase from age 55.
- Inheritance Planning – Funds within a SSAS are not subject to inheritance tax and can be passed on to a member’s beneficiaries.
Who can take out a SSAS?
A SSAS can be taken out by the directors and executives of a Limited company or an LLP. You must have at least one member who is an employee or director, and the scheme will be run by its Trustees – usually the members of the scheme. Gibbs Denley can also provide an independent Professional Trustee service.
Contact our advisers today to find out how a SSAS could help your business.