UK Small Self-Administered Scheme (SSAS)

A Small Self-Administered Scheme (SSAS) is a Registered Pension Scheme under the UK’s Finance Act 2004 that can be established by the owner / directors of Small and Medium-sized Enterprises (SMEs) that are registered in the UK.

A SSAS can have a maximum of 11 members, all of whom are required to be trustees and all of whom will control investment strategy. A SSAS is generally set up for the provision of retirement benefits for the owners and directors of a business, as well as other senior staff and sometimes also certain family members, regardless of whether they work for the company.

One of the key features of a SSAS that sets it apart from other pension schemes, particularly SIPPs, is its unique ability to offer a secured lending facility to the scheme’s principal employer or other participating employers. It can also acquire commercial property, including the principal employer’s trading premises and then lease it back on commercial terms.

Why Choose Sovereign?

Investment flexibility and control

A Sovereign SSAS has all the benefit flexibility you would expect from a UK Registered Pension Scheme. You can choose to invest your SSAS pension funds in a wide variety of ways, from stocks and shares to unit trusts, corporate bonds and commercial property.

Pension benefits may be accessed from the age of 55, or earlier in the case of ill health, with the option of taking 25% as a tax-free lump sum.

Transfers-in from other Registered Pension Schemes (including SIPPs) are permitted, as are transfers from QROPS. It is also possible to transfer out to such arrangements.

Tax benefits

SSAS pensions offer the same tax benefits as other occupational pension schemes. For member contributions, basic rate taxpayers get a 25% tax top up, while higher rate taxpayers can claim additional relief on their tax return. On top of this, most assets and investments within the scheme have no tax liability, and any commercial property in the scheme is exempt from capital gains tax on the final sale.

Allowances

A Sovereign SSAS is subject to the normal allowances that apply, including the Annual Allowance and Lifetime Allowance (LTA). The usual Lifetime Allowance Tests apply in most situations where benefits are ‘crystallised’ and if the value of those crystallised benefits exceeds the LTA, then a tax charge will apply. Members who have previously saved into a UK Registered Pension Scheme and have applied for Transition Protection may be entitled to a higher LTA.

Business benefits

Owner/directors of Small and Medium-sized Enterprises (SMEs), registered in the UK, who want more control over their own pension arrangements. Due to its ability to transact with the principal employer, a SSAS can assist with injections of cash into a company by acquiring company assets such as commercial property and shares, as well as being able to offer a commercial lending facility. Companies can take out a loan from their SSAS pension to fund their business, at an interest rate of 1.5%.

This ability to interact with the principal employer means that a SSAS can not only assist with retirement planning, but it can also be an effective business tool.

Multi-generational benefits

SSAS permit non-employee family members to join and the SSAS can hold assets in trust and pay benefits to families long after the original members have passed. As a pension, the SSAS is also protected from company and personal creditors.

Expertise

Sovereign has a dedicated and highly experienced SSAS team to ensure you can make the most of the SSAS structure.

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