Think Pension, Think Longhurst, Part 4

Longhurst Limited

3rd December 2018

Think Pension – Think Longhurst

 

This article forms a five-part series where I explore the world of pensions.

Yes you read that correctly; head-line grabbing, tax efficient, adventure initiating, and dare I say, very exciting PENSIONS.

 

PART FOUR – SMALL SELF ADMINISTERED SCHEMES (SSAS)

 

 

A SSAS, also known as a Small Self Administered Scheme, is a company pension scheme, the members of which are usually directors and key employees of the sponsoring employer.

We offer a specialist SSAS advisory service to business owners who are looking to benefit from the additional advantages available through this taxation wrapper.

Whilst subject to the same rules relating to contributions and benefits as a normal company pension scheme, SSAS schemes have considerably more flexibility and control over the investment policies and the scheme’s underlying assets.

Other considerations are that only one scheme is permitted per employer, normally the scheme should have less than 12 members and there can be limits on the amount of investment.

 

SSAS Loan Options

Your SSAS can also make a loan to its sponsoring employer, or any party unconnected to the member (but you personally cannot). Some key facts to consider:

  • Only a SSAS (Small Self-Administered Scheme) can make a loan to a sponsoring employer. A SIPP cannot do this.
  • 50% of the net value of the fund can be loaned.
  • Any loan to a sponsoring employer must be on a commercial basis.

This style of pension strategy must be considered carefully before being committed to; however there can be some clear potential advantages;

  • The member’s SSAS receives interest on the loan to their business.
  • Loan interest repayments are a deductible business expense
  • Loan interest received by the SSAS is not subject to tax.
  • The SSAS’s exposure is secured through a first charge on an unencumbered asset.

 

NEXT STEPS

If this article raises spikes an interest, or raises a question, please let me know.

All discussions are confidential and initially held at my expense. 

 

Part five, and our final piece of this series, focuses on our market leading At-Retirement service, called SmartRetire™.

 

Think Pension, Think Longhurst.

 

Chris Broome FPFS is owner and Chartered Financial Planner at Longhurst. Longhurst are an STC member firm of lifestyle financial planners and independent financial advisers based on Silverstone Park. Chris is a Pension Transfer Specialist and holds advanced qualifications in this area of advice.

We’re also the folks behind the Inside Silverstone business podcast, so get in touch if you’d like to appear on the show!

 

Contact:

W: www.longhurst.co.uk

E: chris@longhurst.co.uk

T: 01604 210636

M: 07793 841654

 

 

A pension is a long term investment, the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation. 

Information is based on current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change.

The value of your investment can go down as well as up, and you can get back less than you originally invested.

By transferring your occupational pension scheme benefits into a personal arrangement, you may be giving up rights to guaranteed benefits, known levels of pension income and increases that will be applied in the future.

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