Lucesco Pensions and Investments
What is a SSAS?
A Small Self Administered Scheme (SSAS) is a pension set up under trust by a limited company for the benefit of its directors and nominated beneficiaries. As the members are also the trustees, they control investment policy and how the scheme should be run.
For you as a business owner/director a SSAS offers you tax-efficiency, control over the investments selected and flexibility when it comes to taking your retirement benefits. This can be particularly useful in the event of a sale or takeover of the business or when directors require a phased exit from the business. A SSAS also permits the business to purchase it’s own commercial property using pension funds or borrow from the pension fund for e.g. expansion.
Tax efficiency of the SSAS?
- Investments grow free of Income Tax and Capital Gains Tax in most instances
- Tax credits for you and your business on contributions paid to the scheme
- From age 55 you can access 25% of the fund tax-free
- Retirement income can be taken in a tax-efficient manner and time to suit you, using Flexi-Access Drawdown (rules apply).
- If you die before age 75, the fund is paid tax-free to your beneficiaries
- If you die after reaching 75, the fund is paid to your beneficiaries as income at their marginal rate of tax, or as a lump sum at 45% tax
- The fund falls outside your estate for Inheritance Tax purposes
Investment choice and control
You as the trustees of the scheme decide how you invest the assets /funds of the scheme. This gives you, the trustees, the ability to choose an investment strategy that is right for you and your business. The scheme can accept a broad range of investment types, including the following:
- Quoted equities
- Gilts, bonds and fixed interest stocks
- Futures & options
- Unit Trusts and OEICS
- Insurance Company funds
- Shares in private companies
- Commercial property
- Industrial property
- Offshore funds and more
Flexible retirement options
A pension is designed to help you save for your retirement and the SSAS is no exception. However it is also a tool for business owners to manage their long term finances in a tax efficient manner, including reducing your corporation tax bill. The SSAS can be used as a vehicle to exit the business or indeed as an estate planning tool, because the funds fall outside of your estate for inheritance tax.
A pension scheme should not be viewed as a drain on your company’s resources, but as an integral tool of the business and you as a director. We can assist you in structuring and setting up the scheme. Then we will guide you through how to make it work effectively for you going forward.
Visit our website for more information www.lucesco.co.uk