How a SSAS can help you and your business
What a SSAS offers you?
Most people's personal reasons for choosing a SSAS consisted of:
A fund for the future
A SSAS allows you and those your business admit to the pension scheme a pension fund for the future.
A SSAS allows you the trustees, complete control over the pension scheme, from investing money to paying out the benefits on retirement.
Tax free growth
A SSAS is completely free from
capital gains tax, this means that when you sell investments you will
not be liable to tax on the gain.
Tax free investment returns
Investment income is tax free, this means the income from dividends (excluding the tax credit) is not subject to income tax.
Tax relief on money paid in
If you or another person pays money into the SSAS, those payment will qualify for tax relief. The amount of tax relief will depend on your income from employment.
Tax free lump sum
A quarter of accumulated fund is
free of income tax, up to a personal lifetime allowance. This lump sum
can be paid from age 55 and you do not need to retire to take the tax
free lump sum
Tax efficient to your beneficiaries
If you die before taking the benefits, the accumulated fund will be paid tax free to your chosen beneficaries. There is a lifetime limit on the amount payable and the rule changes after on death age 75 or when you take the money, if earlier. Under such rules tax will be payable.
What a SSAS offers your business?
These are the most popular reasons why businesses use SSAS for their owners and key employees.
A SSAS allows your business to contribute pre-tax profits and obtain tax relief on those payments. This will reduce the amount of tax your business pays. We will help you and your accountant determine the amount that will qualify.
Loans to the business
Payments made to the pension bank account can be invested back to the business in the form of a secured loan, which the business will repay on secured, commercial terms. The business will get tax relief on those interest payments.
Shares in the business
A SSAS can also hold shares in the business, of up to 5% of it's assets. This means that the pension scheme will receive dividend income and future disposal of shares can be tax free on the pension scheme.
Ring fence from creditors
A SSAS is created under a discretionary trust. Thiis allows the pension scheme's asset to be kept legally separate from those of the Company and it's creditors.
The Company can sell and transfer assets it owns to the SSAS, provided that there is a sound commercial benefit to the scheme for doing so and the asset would not be taxable on the scheme or the members.
Guarantee and debentures
In difficult times, the Company
may be looking for short term funding whilst awaiting for book debts to
be settled by creditors. If it is prudent and commercially rewarding for
the SSAS to do so, the scheme can act as a guarantor to the business or
unconnected third party.