Latest News

What about tax relief on contributions?

Contributions to any registered pension scheme are subject to the same rules. There is no limit to what contribution can be paid BUT there is a limit to the maximum that can be paid in any one “input” year that may receive tax relief (the “Annual Allowance”) and avoid a tax charge on the member.

The “Annual Allowance” for 2013/2014 tax year is £50,000 reducing to £40,000 on 6 April 2014. This is the total contribution from all sources to all registered pension schemes.

If you have been a member of a pension scheme at any time in the last 3 years there are “carry forward” provisions that enable you to catch up on any shortfall from the maximum allowable contribution in the last 3 years. There is a link to HMRC’s allowance calculator in the page.

Personal Contributions

The maximum amount of contributions on which a member can claim relief in any tax year is the greater of:

  • the ‘basic amount’ – currently £3,600, and
  • the amount of the individual’s relevant UK earnings that are chargeable to income tax for the tax year.

Where a member’s relevant UK earnings chargeable to tax are less than £3,600, tax relief on the amount of any contribution over the level of their earnings up to the £3,600 limit can only be given if the contribution is paid to a pension scheme that operates the Relief At Source (RAS) system.

Relevant UK earnings means:

  • employment income,
  • income which is chargeable under Schedule D and is immediately derived from the carrying on or exercise of a trade, profession or vocation (whether individually or as a partner acting personally in a partnership), and
  • income to which section 529 of Income and Corporation Taxes Act 1988 (ICTA) (patent income of an individual in respect of inventions) applies.

Relevant UK earnings are to be treated as not being chargeable to income tax if, in accordance with arrangements having effect by virtue of section 788 of ICTA (double taxation agreements), they are not taxable in the United Kingdom.

Company Contributions

The maximum that a company can contribute for a scheme member and claim Corporation Tax relief in any year is subject to the Annual Allowance test and also be acceptable to their Inspector of Taxes as being wholly and exclusively for business purposes.

 for more about tax relief on contributions.


How does a SSAS work?

The sponsoring employer of the SSAS pays money into a separate bank account specifically set up in the names of the trustees. The money in this account is invested and grows with interest, dividends, rents and further contributions. In addition any asset purchased or transferred ‘in specie’ may increase in capital appreciation to build member funds within the SSAS.

At retirement, the SSAS fund is used to provide each member with a tax free pension commencement lump sum and an income in retirement. The whole operation is managed by the trustees, who are initially appointed by the sponsoring employer.

 for more about SSAS.


Can a SSAS borrow funds for investment purposes?

A SSAS may borrow to invest and to provide a member’s benefit which has become payable.  The maximum amount that can be borrowed is 50% of the net asset value of the SSAS.

 for more about SSAS.


What can the SSAS Trustees invest in?

The new simplified tax regime imposes few restrictions on the type of asset that the SSAS Trustees of schemes can invest in, although there will be tax charges in relation to certain types of investment – for example, those aimed at taking value out of the pension scheme. There will also be tax consequences of investing in taxable property which includes residential property and personal chattels.

There is a single set of investment rules for tax purposes, applying to all types of scheme, although schemes will of course remain subject to any relevant s, or other general restrictions outside tax law.

General trust law requires the SSAS trustees to act prudently, conscientiously and honestly when making decisions in respect of the scheme. SSAS trustees should at all times act in the best interests of scheme members in their capacity as trustees and not as employees, shareholders etc. Trustees should always seek independent financial advice.

SSAS Trustees can invest in a broad range of investments, including:

  • Commercial property and land including farmland
  • UK quoted shares, stocks, gilts and debentures
  • Stocks and shares quoted on a recognised overseas stock exchange
  • Futures and options quoted on a recognised stock exchange
  • OEICs, unit and investment trusts
  • Hedge funds
  • Insurance company funds
  • Bank and building society deposits
  • Investment grade Gold bullion
  • Secured loans to participating employers

 for more about SSAS Trustees.


Can other pension funds be transferred into a SSAS?

A SSAS can accept transfers from other registered pension schemes. This means that if scheme members have made pension provision in the past, or have accrued benefits under previous registered pension schemes, these can be consolidated within the SSAS. Such transfer payments will be added to the existing entitlement under the scheme to enhance a member’s benefits.

 for more about SSAS.


  • SSAS and Legal Entity IdentifiersWhat are Legal Entity Identifiers and Does Your SSAS Need One? From 3rd January 2018 it will be a requirement for legal entities and structures to obtain a reference called a Legal Entity Identifier (LEI) from the London Stock Exchange in order for the trustees of a SSAS to carry on investing. This» Read More
  • Mr D.B.PML always puts my interests first. Being a fairly cynical type, I have not always found it easy to be convinced that the pension adviser I am talking to for advice and guidance is genuinely prepared to put my interests before his own potential earnings from commission!
  • How we work closely with Financial Advisers (Part 1)At Pensions Management Limited, we often work with a client's Financial Adviser. Such cases usually involve us in: providing good administration, commercial property purchase, flexible use of options or just listening and talking about possible options and alternatives. We have always prided ourselves in being approachable. A Financial Adviser asked us to» Read More