Self Administered Pensions as Onshore Tax Havens

Directors who hold at least 20% of a company's shares are eligible to make retirement provision through the setting up of a Small Self Administered pension Scheme (SSAS). These occupational schemes, constituted as trusts, have extremely attractive features for financing, legal and tax purposes.

As their name suggests, ownership of investment assets and the investment policy pursued, are under the control of the trustees, who are typically the sponsoring company's directors. Appreciating assets such as commercial property, particularly if occupied by the sponsoring company, and shares in the family company, or elsewhere, are eligible to be held within this tax efficient 'wrapper'. The main advantages of this type of arrangement are as follows:

• Within certain limits, company contributions into SSAS's are fully corporation tax deductible. As most schemes are set up as money purchase, rather than final salary, this gives directors the opportunity to use this distribution payment channel as a means of reducing taxable profits,
• Once an asset is transferred into a SSAS, all future capital growth and investment income is totally tax free,
• Assets owned within a SSAS are generally legally ring-fenced out of the reach of potential creditors which could arise through company insolvency,
• Within prescribed limits, SSAS's can loan back finance to the sponsoring company.

Depending upon the age structure of the individuals behind a typical family company, and the appreciating assets held by the family and this business, the setting up and use of a SSAS can be extremely attractive. We are able, in association with our subsidiary business Whiting & Partners Wealth Management Limited, and through ongoing professional associations with local pensioneer trustees, to fully examine and report to you on whether a SSAS could be suitable to your circumstances.

Other Practical Examples of our Pension Scheme Expertise

Preparing statutory accounts in accordance with FRS 17 and the Pensions SORP. Salary sacrifice to boost pension funding.

Holding farm land within a SSAS as an inheritance tax planning exercise. Loaning money back from a cash rich SSAS to the principal employer.