Business
A Small Self-Administered Scheme (SSAS) is a pension Trust set up by a limited company or a partnership. A SSAS is primarily set up by private and family run limited companies for the benefit of the owner directors and senior employees. The members are also Trustees and so have control and flexibility over the Scheme assets and investment choices in a tax efficient environment. The key features of a SSAS are: It is an occupational pension scheme The members are usually directors or employees of the sponsoring employer There is a limit of 11 members It is a highly tax efficient environment You have control of the investment decisions A SSAS is an occupational pension scheme established in the Finance Act 1973 and is usually, but not always, set up by the directors of a business. The directors may want greater control over the investment decisions for their pensions, especially the use of their pension plans, to invest back into their business or indeed other businesses, should they wish. A SSAS is registered with HMRC and so benefits from wide ranging and generous tax reliefs available to pension schemes. These may include, but not limited to: No Income Tax on allowable investments No Capital Gains Tax due on disposal of investments Company and personal contributions are deductible against tax Tax-free lump sum on death before retirement Tax-free lump sum from age 55 on retirement A SSAS is not an FCA regulated product and so the ‘wrapper’ or vehicle is not covered by the Financial Services Compensation Scheme (FSCS). However, the FSCS does cover any regulated investments held by the SSAS. Each member of the SSAS is a Trustee which is a requirement to comply with the Pensions Act 1995. A SSAS is a truly eye-opening concept that will leave you wondering why you didn’t know about it long ago, irrespective of what age you are! And that can be a fear for many – they don’t know what they don’t know. Being a Trustee of your own SSAS is similar in many respects to running your own business. In fact, it calls on exactly the same business acumen and tenacity and should not be something that should be feared. For sure, there are rules to learn and be followed, the same as in any walk of life. However, once you have mastered the basics relatively quickly you will start to see the immediate benefits and experienced the feeling of freedom and control which will, I assure you, become intoxicating! The responsibility should not be taken lightly in setting up any business and a SSAS is no different in that respect. Embrace the knowledge and drive your own path towards an incredibly fulfilling future with the empowerment of a SSAS pension.