A SSAS can provide financial flexibility for a business. For example, in line with HMRC rules, the SSAS can make a loan to the sponsoring employer or purchase commercial property to lease back to the sponsoring employer at an open market rent.
Under current legislation a SSAS enjoys considerable tax benefits:
- Employers’ and Employees’ contributions normally qualify for tax relief in the year they are made
- Investments (other than dividend income) are generally exempt from UK Income Tax and Capital Gains Tax (CGT)
- Lump sum benefits on death will normally be free from Inheritance Tax
- On retirement, a tax free lump sum of up to 25% of the fund can be drawn down (limited to 25% of the Lifetime Allowance), unless the lump sum is “protected”.
