| KEY (DIFFERENCES ARE HIGHLIGHTED BELOW) |
SSAS |
SIPP |
| Membership |
No restriction on who can be a member |
No restriction on who can be a member |
Establisher of the
Scheme |
The employer usually acts scheme provider. An employer is not restricted to a limited company |
The SIPP provider is traditionally a financial house, such as a bank, building society, insurance company. The definition of provider has been widened. |
| Investments |
The investments are registered in the name of the member trustees |
The investments are registered in the name of the SIPP trustee company. |
| Investment choice |
The member trustees may invest the assets of the scheme in accordance with the rules of the SSAS |
The member may invest his funds in accordance with the SIPP rules. SIPP rules will be specific to the type of SIPP product chosen. |
| Loans |
Yes, up to 50% of the assets of the scheme to an employer. 1st charge security required. No limit for unconnected parties |
As connected party restrictions apply to SIPP, scheme lending highly unlikely to meet HMRC criteria. |
| Borrowing |
50% of the net value of the fund |
As with SSAS |
| Annuity Purchase |
Not compulsory |
Not compulsory |
Pension
Drawdown |
Yes, available via unsecured pension and alternative secured pension. Can provide scheme pension |
Available via unsecured pension and alternative secured pension. Does not provide scheme pension |
| Contributions |
Can have full tax relief at source on personal contributions. |
Basic rate tax relief at source only. Higher marginal rate secured via annual returns. |
Allocation of invest-
ments |
Investments do not need to be allocated amongst the members, as a common trust principle applies |
Operates on a master trust principle, non-earmarking does not arise. |
Allocation of contribu-
tions |
Contributions do not need to be earmarked at outset. |
Contributions are earmarked at outset. |
Pension Commence-
ment lump sum |
Where protection does not apply, typically 25% of the value of the fund |
25% of the fund |
Death
Benefits rules |
As per SIPP, with the exception of scheme pension |
As per SSAS, with the exception of scheme pension |
| Administration |
Required to provide an annual return to the Pensions Regulator and pay a levy to the Pension Scheme Registry (£24.00 for two members for two years). Not required to provide an SMPI statement where all members are trustees. |
Is not required to provide an annual return to the Pension Regulator nor the Pension Scheme Registry. Must provide an annual SMPI statement |
| Trust Structure |
Common Trust |
Mastertrust |
