Pension Practitioner
The SSAS Experts
06
AUG
2013

SSAS loanbacks

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A SSAS can be used to provide a loan back to your business. There is no minimum loan amount but the maximum you can loan is limited to 50% of the net asset value of your pension (this includes any pension transfers in you make to your SSAS). The loan must have a commercial interest rate (at least 1% above high street bank rates, currently 0.5%) and must be secured as a first charge on an asset of equal value. Assets typically used for security are commercial property, a floating over the company or the company shares, although the legislation does not distinguish between ‘acceptable’ and ‘unacceptable’ assets that can be used for the purpose of the security.  In addition the maximum term of the loan is 5 years and capital and interest must be paid back to the pension scheme at least annually in equal instalments.

Loan agreement fees are available on application.

The loan is directly from your pension to your business and therefore can be used for
the best benefit of your business, e.g.

– Consolidate existing debt at a lower interest rate
– Free up cashflow for you and your business
– Increased purchasing power for your business
– Expand your business into new product and service sectors
– Acquisition of commercial property and land, but excluding residential property (unless you run a property business)
– As the loan is paid directly from your pension to your business, the interest is repaid back to your pension, the interest payments are tax deductible.

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