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Resurgence in SSASs following Budget?

ended 17. March 2023

A Newspage wealth manager has noted that, “with the scrapping of the lifetime allowance, small self-administered schemes are looking even more attractive for small business owners. They already offer the ability to lend money to the business but, with the removal of the lifetime allowance, they offer another IHT-efficient mechanism for business owners. Previously, the lifetime allowance had limited their efficiency for this but with the removal of the cap, expect to see a resurgence in SSAS uptake.” Any thoughts on this, whizz them over. We'll be sending your comments to a broadsheet, probably the FT or Sunday Times, as an exclusive later tomorrow morning as it's a good 'un. 


 

4 responses from the Newspage community

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Editor
Sam Alsop-HallVerified
Chief Strategy Officer at Clive Henry Group
Small self-administered schemes (SSAS) and pensions in general are now even more valuable to business owners. Business owners may be able to meet their financial planning objectives quicker because of the annual limit increasing from £40,000 to £60,000 and the elimination of the Lifetime Allowance. It’s good news especially for prudent and forward thinking SME business owners to plan ahead for themselves and their families.
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Samuel Mather-HolgateVerified
Independent Financial Adviser at Mather and Murray Financial
If all members of a SSAS are set up as trustees there is greater flexibility in what you can invest in and less admin involved. The main benefits involve the ability to buy your commercial property and lease it back to your company, loaning your company money and even investing in your company by buying an equity stake. Members group together to use the accumulated pot as the vehicle and with the removal of the lifetime allowance, this means much bugger investments can now be made which is great news for business owners.
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Alastair HoyneVerified
CEO, Finanze Capital at Finanze Capital
SSAS pensions were already a hugely efficient vehicle for limited company directors to mitigate both IHT and promote tax-efficient growth through buying their own commercial property, using the general fund to mitigate large corporation tax bills and being able to lend back to the 'sponsoring employer'. They will now become even more efficient. Where previously you were capped to circa £12m across 11 trustees, you now have unlimited amounts to accumulate and, with a firm's ability to pay in more than £60,000 per trustee, a vehicle to accumulate wealth quickly that doesn't necessarily remain trapped. Especially if using the CMO strategy to buy assets with the pension, leasing them to external entities to sublet and creating external income to use now. Time to accumulate ahead of another government capping again.
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Joshua GerstlerVerified
Chartered Financial Planner at The Orchard Practice
SSASs have always been a good vehicle for business owners wanting to lend themselves money from their pension schemes. For those looking to borrow large amounts of money, the removal of the Lifetime Allowance might tempt them to start building up their SSAS even further. Another interesting knock-on effect may be the ability to now purchase more expensive commercial property in a SSAS/SIPP than had been possible previously. Quite rightly, people did not want to purchase a commercial property where they had a realistic expectation of the value surpassing the Lifetime Allowance. This will no longer be an issue and we expect to see renewed interest in using a SIPP or SSAS to purchase commercial property.