There are many and varied pension options available, of which the small self-administered pension scheme – or SSAS – is just one.
And before going ahead with any pension, we would always suggest you seek independent financial advice, so you can get a truly objective and expert opinion about what is right for you.
Also, a SSAS is only available if you are the owner or director of a limited company – in some ways, it is the business owner’s equivalent of a SIPP (a self-invested personal pension). But assuming you fit that criteria, and you have taken advice, and you’ve decide to go down the SSAS route, what next?
Setting up a SSAS pension
Here is how a SSAS works: your company (or companies), set up a registered pension scheme and become joint administrators.
There is usually a corporate trustee appointed too – in the case we advise on Day Cooper Day. This corporate trustee will act as a scheme administrator alongside you. Although having a corporate trustee is no longer a legal requirement, most SSAS schemes use them to ensure that all scheme procedures and investments are carried out within HM Revenue & Customs guidelines.
The corporate trustee will be responsible for registering the SSAS with HMRC and providing the required information to scheme members, HMRC and The Pensions Regulator.
You can then invite up to 11 key members of your staff and, in certain circumstances, family members to join. All members of the scheme will also be trustees and decisions need to be taken together and unanimously.
You HAve set up a SSAS – what next?
You and the other members start paying into the pension. As with all company pension schemes, HMRC limit the amount of tax relief given by limiting the contributions that can be made in respect of any member (known as the ‘annual allowance’). Currently this is £40,000 per person.
So now your SSAS is up and running, you and your fellow members can decide what to invest in. It brings many advantages; you can use it as a tax planning tool, and even leverage it to provide funding for your business.
For more information about the SSAS pension and setting one up, please get in touch with the team here at The London Tax Company Ltd.