We might as well start as we mean to go on and you will soon realise that the pensions Industry loves acronyms. Usually the longer and more complicated the better. So the first one to start the ball rolling is SSAS. That means Small Self Administered Scheme.
A SSAS is an occupational pension scheme (basically a company pension scheme) that gives its members and trustees lots of flexibility and control over what it invests in. Hence the “self administered” part of its title. The scheme is limited to 12 members and they are most likely to be directors or key employees of a company – which is known as the ‘Sponsoring Employer’.
The Sponsoring Employer is the company who pays the contributions to the scheme on behalf of its employees. Contributions can be varied in line with its profits and there is no contractual commitment to pay any level of contributions so no profit one year = no contributions have to be made.
A SSAS is a niche, specialist product which needs a great deal of expertise to deal with the onerous restrictions and rules placed onto it. HM Revenue & Customs regulations govern the scheme and we make sure your scheme stays in line with the rules to avoid any nasty tax charges.
A SSAS is registered with HM Revenue & Customs as a registered pension scheme and it attracts some great tax reliefs. In our opinion, the top best things a SSAS can do are:
– Corporation tax relief on company contributions – the amount paid is taken out of the company profits for the year for the tax bill calculation. Great!
– Tax free death benefits – IHT and income tax
– It can buy commercial property (which can be leased back to your business)
– It can lend money to the Sponsoring Employer
Want to know more…?
We could go on all day about how great a SSAS is and we have a guide here which goes into more detail, so take a look.