SSAS for Business
Owners
Bringing business and pension planning together
A Small Self-Administered Scheme (SSAS) can offer business owners opportunities to connect their pension planning with their wider business interests.
Two features that can be particularly relevant are the ability for a SSAS to lend money to its sponsoring employer and to invest directly in commercial property. Both are subject to specific rules and require careful consideration by the trustees.
Loans to your business
A SSAS can lend money to its sponsoring employer, providing a potential source of finance for the business while generating interest for the pension scheme.
Strict conditions apply, including requirements relating to security, interest rates, repayment terms and the amount that can be lent. The trustees must ensure that any loan meets the relevant requirements and is appropriate for the scheme.
Highstone works with members and their professional advisers to support the administration of proposed employer loans. We require an independent specialist solicitor to undertake the associated legal work and document the transaction.
Commercial property
A SSAS can invest directly in commercial property, including premises used by the sponsoring business or property let to unrelated tenants. This can allow business owners to bring their commercial property and pension planning together.
A SSAS can also purchase commercial property from members, the sponsoring employer or other connected parties, provided the transaction takes place at market value, supported by an independent professional valuation. Where property is leased to the sponsoring business, rent must be paid to the pension scheme on commercial terms.
The property is held as an asset for the benefit of the scheme's members, subject to the relevant pension rules and the trustees' responsibilities.
Where appropriate, a SSAS may also be able to borrow from a commercial lender to help fund a property purchase, subject to the applicable limits and requirements.
Property transactions require careful consideration of the purchase price, rental terms, financing, legal structure and the needs of the scheme. Property can also be difficult to sell quickly, so trustees must consider liquidity and the wider investment position of the pension scheme.
Highstone has practical experience in the administration of SSAS property transactions and ongoing property arrangements. We require an independent specialist solicitor to act for the SSAS trustees throughout the transaction and undertake the associated legal work.
Specialist support throughout
Employer loans and property purchases involve specific rules, legal requirements and important trustee decisions. Highstone provides specialist trustee and administration support, working alongside members and their professional advisers throughout the process.