The SSAS Special 6: Tax Benefits
The purpose of taking out a SSAS pension is to provide a pot of money for you to fund your retirement, and it’s obvious that the more money you have in the pot, the more you can rest assured that your financial future is secure. However, the taxes you are required to pay on your pension contributions can often have a bigger impact on your final number than you might expect, and result in a much smaller retirement fund.
Thanks to the innovative structure and inherent flexibility of a SSAS, it is one of the most tax-efficient on the market. Because a SSAS is registered with HMRC, it benefits from the usual tax reliefs, according to rules and regulations.
- Your company and personal contributions are deductible against tax
- There is no Income Tax on allowable investments
- There’s no capital gains tax due on disposal of investments
- You can take out a tax free lump sum from age 55 on retirement
- Your family can receive a tax free lump sum on death before retirement.
However, as well as the above, a SSAS pension can offer a range of additional tax benefits for SME business owners who have one in place, which include:
- Purchasing commercial properties which can then be leased back either to your business or to a third party
- Providing loans to the sponsoring employer
- The opportunity to invest in your own company by buying an equity stake
- ‘In-specie’ transfers into the pension, which are the personal transfers of assets from your or members of your family
A SSAS is the perfect pension to allow the investments you make to grow in a tax-free environment, and the new ‘death tax’ rules that mean that if your loved ones or family members also become members of the scheme, they can make the most of what you leave behind without any inheritance tax penalties.
The flexibility of a SSAS also means that due to the changes that come into force in April 2015, savers are able to use their pension fund when they need it; in essence, you can use your pension like a bank account by making withdrawals when required, of which 25% is tax free.
Whatever your pension requirements and however you wish to use it, a SSAS pension is the best choice on the market for tax efficiency.
To find out more, call SSASCo today on 0845 862 2869 to talk to our friendly team of SSAS specialists.