What is a SSAS?

A SSAS is an occupational pension scheme that gives its Member Trustees considerable flexibility and control over the investment policy and underlying assets.
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A SSAS is a bespoke pension scheme created specifically for an employer and will require a package of bespoke paperwork to be produced. Registering a new SSAS with HMRC can take several weeks/months.

Can a partnership or LLP establish a SSAS?

As noted above, a SSAS is an occupational pension scheme established by an employer for the benefit of selected directors/employees. Whilst in theory a SSAS could be created by a partnership or an LLP, it could only include employees of the partnership/LLP and not the partners.
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This usually means that the individuals who wish to be included in the SSAS cannot actually be included because they are not employees of the entity that has created it.

How many Sponsoring Employers can a SSAS have?

If required, a SSAS can have multiple sponsoring employers. There must be links between the various companies that wish to participate in the same SSAS.
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These can include common shareholding/common directorship and any company wishing to participate in the SSAS must make contribution(s) to it in order to justify their inclusion/participation in the scheme.

Does a SSAS need a Professional Trustee & Scheme Administrator?

A SSAS does not need a Professional Trustee, but each SSAS requires a Scheme Administrator (an official role required by HMRC for Registered Pension Schemes). However, having a Professional Trustee involved in a SSAS can be helpful to the Member Trustees, who can benefit from the Professional Trustee’s knowledge and expertise to make sure that the SSAS is administered correctly in accordance with legislative and HMRC requirements.
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Where we are establishing a new SSAS, we require that Denton & Co Trustees Limited is a co-trustee and it will be co-owner of the SSAS assets.

The Member Trustees and Denton & Co Trustees Limited will together be the ‘Scheme Administrator’ for HMRC purposes. To be appointed as Scheme Administrator, each Trustee will need to qualify as a ‘fit and proper person’.

The Scheme Administrator’s role is (among other things) to:
  • register the scheme with HM Revenue & Customs (HMRC)
  • report events relating to the Scheme and the Scheme Administrator to HMRC
  • make returns of information to HMRC
  • provide information to Scheme Members and others regarding the lifetime allowance, benefits and transfers
  • generally undertake such other tasks so as to maintain the beneficial tax status of the SSAS.

How long does it take to establish a SSAS?

A key part of the process to establish a SSAS is to register it with HMRC. This can take several weeks or months.
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There can never be any guarantee that HMRC will accept and register a Scheme, following its checks on the employer that is creating the scheme.

What is SSAS Practitioner?

A SSAS Practitioner is an individual or company that usually provides a guidance-only service to the Member Trustees. » read more
It does not normally, become co-trustee, joint Scheme Administrator and joint signatory to the SSAS Trustee bank account, and does not take on the responsibilities that these roles entail.
 

Will a SSAS work as a family scheme?

A SSAS can serve as a planning tool for family businesses where children of some/or all of the Members become directors/employees of a sponsoring employer.
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A SSAS can be particularly helpful for creating liquidity because of its pooled nature; for example, older Members wishing to access the more liquid assets for pension commencement lump sums/pension payments, can look to these assets within the scheme and, perhaps, less liquid assets (of equivalent value) can be retained within the SSAS for younger Members.

Why use a SSAS?

Under current legislation a SSAS enjoys considerable tax benefits. A SSAS can also provide flexibility in relation to the investment of scheme funds and the provision of benefits to Members and their beneficiaries.
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Beneficial features of a SSAS include:
 
  • ​employer and member contributions normally qualify for tax relief subject to certain requirements
  • investment income and gains (other than dividend income) are generally exempt from UK income tax and capital gains tax (CGT)
  • lump sum benefits on a member’s death will normally be free from inheritance tax
  • when taking benefits, a tax free lump sum of up to 25% of the member’s share of the SSAS fund is normally available, subject to the member’s remaining lifetime allowance. In a small number of cases this could be more than 25% of the fund/lifetime allowance depending on individual circumstances
  • fees for the administration of the SSAS can be paid by the sponsoring employer and it should be treated as a business expense.

How does a SSAS work?

Once the SSAS has been established and registered with HMRC, funds can be paid into the Trustees’ bank account by way of contributions from the sponsoring employer (and sometimes from members) and transfers from Members’ other pension schemes (which will be in the form of cash and/or acceptable assets). 
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Further contributions can be made as and when required. The Trustees invest the funds prudently (as required under trust law) to try to achieve growth in the form of, for example: interest, dividends, income (such as rent from leasing commercial property to a tenant) and capital growth.

The value of a Member’s interest, or ‘share’, in the SSAS fund will depend on the contributions and/or transfers paid in by, or for them, their share of any investment growth (or loss) and any relevant payments made from the SSAS for them (e.g. lump sum and pension payments and partial transfers to other pension schemes).

If Members are to share in the overall performance of the investments in the SSAS fund, each Member’s share at any time will be a certain percentage of the entire SSAS fund. Alternatively each Member’s share can be linked to the performance of particular investments but this would require the agreement of all Member Trustees and recorded in a Trustees’ resolution.

The amount of the benefits that a member can receive will depend on the value of their share of the SSAS fund at the time they decide to take benefits. Dentons will advise the Trustees of the value of each Member’s percentage share of the SSAS fund in the Member’s Annual Statement.

How does a SSAS differ from a SIPP?

Although they share some similarities, Dentons SSAS and SIPP have different legal structures and investment options. As noted above, a SSAS is an occupational pension scheme and it is created using a bespoke package of documents specific to that individual employer.
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On the other hand, the Dentons SIPP, is a self-invested personal pension, which has several thousand Members, each of whom has an individual fund which is legally ring-fenced from all other Members.

In addition, each Dentons SIPP Member has a SIPP bank account opened specifically for their SIPP, whereas with a Dentons SSAS, one bank account is opened for the scheme as a whole (including multiple Member schemes).

There are also some differences in terms of investments that can be made; for example, SSAS loans to employers.

What investments do we allow?

We designed the Dentons SSAS to provide the Member Trustees with investment flexibility from an extensive range of potential investments. We will consider most investments, but there are some we do not allow.
 

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Please download a copy of our Permitted Assets to find out more:

We would recommend that the Member Trustees seek financial advice before making any investment decisions. Dentons will not provide advice on the suitability of assets however, we reserve the right to refuse to hold any proposed investment. 

Please note: If the Member Trustees are considering higher risk investments such as Unregulated Collective Investment Schemes (UCIS), they must confirm that they are a sophisticated investor and complete our Investment Questionnaire.

How many members can a SSAS have?

To ensure a SSAS qualifies for various legislative exemptions and has as much investment flexibility as possible, it can have no more than 11 Members.
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Each member is a Trustee of the Scheme and all their decisions are by unanimous agreement. Although there is no lower or upper age limit for Members, there is a minimum age of 18 in order for the Member to act as a Trustee.

Who can be a member of a SSAS?

A person eligible for membership of the Scheme shall become a Member by invitation from the Trustees.
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Every employee, ex-employee, officer or ex-officer of a sponsoring employer is eligible for membership of the Scheme.

Who are the trustees of a Dentons SSAS?

There are usually two types of Trustees:
 
  1. Member Trustees – these Trustees are responsible for the day to day running of the SSAS and for all the investment decisions. All Members are initially appointed as Member Trustees by the sponsoring employer, in addition to the Professional Trustee.
  2. Professional Trustee - Denton & Co Trustees Limited will act as the Professional Trustee and will be a party to all investments made by the Trustees.
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The main roles of the Professional Trustee are to assist the Member Trustees in running the SSAS in accordance with the governing Trust Deed and Rules and HMRC requirements, to be a party to all Trustee investment transactions and to be a co-signatory on all Trustee bank accounts.

The Member Trustees and the Professional Trustee will together be the ‘Scheme Administrator’ for HMRC purposes. and must be 'fit and proper' persons.

Can a SSAS make a loan to the sponsoring employer?

Yes, a SSAS can make a loan, or loans, to a sponsoring employer, provided that five key criteria can be satisfied:
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  1. maximum loan amount is 50% of the net value of the assets less any existing loans. The loan can be used for most purposes including cash flow and funding company acquisitions
  2. maximum term of the loan is five years
  3. repayments must be in equal amounts of capital and interest during the loan term and must be paid either monthly or quarterly
  4. the interest rate must be at least 1% above the average high street bank base rate. The loan interest, which is allowable as a business expense for tax purposes, is paid into the trustee bank account
  5. loans must be secured by way of a First Legal Charge over a suitable asset or assets. Please note that Dentons requires the security to take the form of commercial (or, subject to acceptance and other conditions, residential) property.

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