Small Self-Administered Pension Scheme (SSAS)

A small self-administered pension scheme, also known as an SSAS, is a self-controlled vehicle for company directors and other staff members to save money together, with notable executive advantages and benefits.

The scheme will be set up separately from the company, effectively by a deed trust, which means it will stay intact if the company ever goes bust.

Members of the scheme remain in full control of the scheme’s assets, which allows for flexible investment. SSASs have been approved by the Inland Revenue since 1976, and are seen as ideal for company directors and executives to control and decide on the size of pension contributions for themselves and their employees.

As with all pension types, SASS contributions are subject to certain rules, including the contributor not being allowed to contribute more than 100% of their annual income.

These schemes have an advantage, however, as because an employer’s contribution is unlimited they can contribute as much as they want on behalf of their employees.

These contributions can also be offset against the company’s corporation tax liability, as long as they are exclusively for the purposes of the employer’s trade.

Schemes with less than 12 members are exempt from the Pensions Act 2004, as long as the decisions are made by an independent trustee or unanimously.

An SSAS must be approved by the Pensions Scheme Office before it can receive tax advantages, and could be subject to certain restrictions dependent on the individual circumstances surrounding the pension.

These schemes also have other restrictions dependent on individual circumstances, and the assistance of an Independent Financial Adviser (IFA) in these situations is highly advisable.

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