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Limited Company Pensions: How to use pensions to the full effect

Limited Company Pensions and SSAS

If you own a limited company, Tax Agility can assist you in implementing an Occupational Pension Scheme, such as a Small Self Administered Scheme (SSAS), in your business. Setting up a SSAS has the following advantages:

1. The SSAS is a trust that acts as a separate legal entity from your limited company, which means that it can give you additional creditor protection in the event of your company becoming liquidated. In order to administer this pension scheme, you must become a trustee of the SSAS, together with a professional trustee, as required by the Pension Act legislation.

2. You can make tax-deductible contributions from your limited company to your SSAS to a maximum of £50,000 each year for every director who is linked to the SSAS.

3. Any assets you purchase within the SSAS will grow in a capital gains and income tax free environment.

4. You can convert any previous pensions held in a Self-Invested Personal Pension scheme (SIPP), or through a commercial pension provider, into a SSAS. This will bolster your capital within the SSAS and enable you to purchase assets within the SIPP.

5. The SSAS can be set up to receive private contributions from individuals receiving the 20% uplift from the government.

6. If required, you may loan back up to 50% of the value of the assets in your SSAS to your limited company on a secured commercial arm’s length basis.

7. The SSAS can acquire intellectual property, or any other fixed property, from your limited company, paying you in cash for the assets. This can provide liquidity to your business and protect the assets in the event of liquidation.

8. On retirement, you may take a tax-free 25% cash lump sum of the benefits in the SSAS. The remaining balance of the funds is taxed and may be drawn as an annuity.

At Tax Agility we can assist you to implement a SSAS structure to achieve the above benefits and unlock your shareholder value in your limited company.

For more information on how we can help you to set up your own SSAS pension scheme, or if you have any questions about what pension scheme is perfect for your limited company, call us today on 020 8108 0090.

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