Pension Practitioner
The SSAS Experts

Current benefits of SSAS pension scheme

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SSAS pension

What is a SSAS?

Is a pension scheme  set up by a limited company or a partnership. SSASs are primarily set up by private and family run limited companies for the benefit of the owner directors and senior employees. Usual pension scheme benefits of a tax free lump sum (generally 25% of the fund), pensions and death benefits can be paid.   It can have up to 12 members.

A SSAS is established as a trust and all members will be trustees. In addition, you could appoint a professional trustee although this is not a requirement.

Members can pay personal contributions but it is normal for SSASs to be funded by employer contributions, to reduce Corporation Tax Liability.  Transfers from other pension schemes can be accepted.


Employer contributions and members’ personal contributions are usually eligible for tax relief. Employer contributions are unlimited and will receive corporation tax relief in the year they are made, provided they are wholly and exclusively for the purposes of the employer’s trade. Tax may be charged on personal contributions  if the total input exceeds an Annual Allowance of £40,000

Generally, SSASs do not pay tax on income generated on investments (interest and dividends) and do not pay capital gains tax.


SSASs may invest in a wide range of investments which are chosen by the member trustees. All members have to agree to all investment decisions, unless delegated to a discretionary investment manager.  SSAS investments including  loans to the sponsoring employer , unconnected third party loans, preference shares, commercial property, equities, gilts, managed funds, unit trusts, structured products and deposit accounts.


Loans up to 50% of the value of the SSAS can be made to the sponsoring employer (known as loanbacks) or other businesses or third parties. Loans cannot be made to members or anyone connected with them. HMRC have stated ‘All loans are only acceptable if they are genuine investments of pension schemes. They should be prudent, secure and on a commercial basis.’

Loanbacks have to be secured by a first charge over an asset (usually property). The asset needs to be valued to show it is worth more than the initial amount of the loan.

The loan must be operated commercially. If capital or interest payments are missed, heavy tax charges can be incurred.


SSASs may invest in commercial and industrial property whether situated in the UK or abroad.   Commercial property of any kind can be a useful planning tool when leased to the family company.

The company obtains tax relief on the rent it pays and the rent received by the SSAS is tax free. Income tax will be suffered when a pension is drawn but the tax is deferred and could be at a lower overall rate.  The purchase may be funded from new contributions, borrowings or transfers from other pension schemes.

Because a SSAS is free of Income Tax on the rent it is more efficient when using a loan to purchase a property as the rental stream can be used directly to reduce a debt.   An individual would have to pay Income Tax before reducing the debt.

The ownership of the property by the trustees protects it from any liquidator of the business.   If commercial property is leased to a connected company, it must be on fully commercial terms, otherwise a tax charge will arise on the members on the value of the “benefit” so enjoyed.

For more information please message or call us on 0800 634 4862

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