Business First Summer 2017 Business First Magazine Summer 2017 | Page 25

SELF-MANAGED PENSIONS
Negotiating the SSAS vs SIPP maze
Michael Galway, Director of SSAS Solutions, examines the options for those seeking to take control of their pension fund to make
investments
he market for self­managed pension
arrangements has changed markedly
over the past decade due to changing
regulations and new freedoms which have
made accessing funds easier.
The developments have also served to widen
the gap between the two most popular
products on the market – SSASs (Small Self
Administered Schemes) and SIPPs (Self
Invested Personal Pensions).
Each are commonly used by business owners
and high­net worth individuals to develop a
bespoke investment strategy for their
retirement fund, and the differences between
the two vehicles are one of most common
queries received by advisors working in the
sector.
SSASs have experienced a resurgence in
A recent tightening of regulations meanwhile
and the scheme trustees believe these are
popularity over recent years as they have been
means SIPP operators are now required to
unnecessary.
sheltered from some of regulatory changes that
categorise assets as either standard or non­
And SSASs can have non­allocated funds, not
have limited the flexibility of SIPPs.
standard, with investments which are not
attributable to any particular member, which
readily realisable within 30 days falling into the can help with the phasing and timing of
Tax­efficient
latter category.
contributions as it is possible to pay
Typically, a SSAS is used as a tax­efficient
Neither is true of SSAS schemes, although
contributions in advance. This enables
wrapper in which to invest in commercial
they must be registered with the Pensions
contributions to be paid over and above the
property or land (with all income and gains
Regulator if they have more than one member.
current Annual Allowance of £40,000 per
from the asset being sheltered from tax) but a
person – which can be particularly useful
long list of other opportunities exists including
Control
where additional funds are needed to assist
investment in agricultural and residential land,
with a property purchase for example.
A SSAS also offers a greater degree of control
shares, gold bullion, intellectual property and
Individual circumstances will always vary, of
to its members, each of whom is a trustee. In
foreign currency.
course, and professional advice should be
the case of SIPPs, trustee responsibilities are
And the unique ability of a SSAS to make a
sought to enable prospective investors
assumed by the provider of the scheme.
loan­back to the sponsoring employer of the
determine which pension arrangement best
Uniquely we operate our schemes without
scheme, has made the arrangement an
suits their needs.
the involvement of any ‘outside’ trustee or
attractive option for those seeking alternative
SSAS Solutions establishes new schemes and
third party administrator, leaving the
means to source capital funding for their
can also take­over existing SSASs from other
trusteeship – and therefore the control –
business.
providers. We provide a full administration and
entirely in the hands of the scheme members.
While SIPPs are an individual pension
HMRC compliance service for the operation and
Nor is a co­signatory required for the SSAS
arrangement, SSASs are occupational pension
management of SSASs along with a full range of
scheme bank account – and the scheme rules
schemes established by an employer typically
consultancy and strategic advice to compliment
are written as widely as HMRC regulations
for the benefit of directors, key employees and
this unique product.
allow (many other providers seeking to restrict
their families.
the
investment
capabilities
of
the
scheme
to
Unlike SIPPs which have only one member,
suit their own risk management principles).
MOREINFORMATION
SSASs can have as many as 11 members
This, aligned with the fact that no investment
participating within the one scheme. This
pre­approval is required from an outside
Michael Galway is Director of
makes them considerably more cost­effective
trustee means that the SSAS Solutions offering
for multiple members of the same company,
SSAS Solutions, Northern
provides the highest possible level of control
especially when a property purchase is
Ireland’s only dedicated SSAS
and flexibility permitted by HMRC.
involved (as the asset is acquired by one entity,
consultancy which administers
This allows investment decisions to be taken
rather than a number of different SIPPs each
purchasing a percentage share of the property). and implemented quickly.
schemes on behalf of more than
This makes a SSAS a useful tool for
300 of the region’s best known
Flexibility
succession planning in family businesses
companies and high-net worth
Flexibility continues with clients given the
because there is no conveyancing involved
individuals. For more
ability to use their own solicitor for legal
when new members join the scheme and older
transactions and in the case of property, the
members choose to exit, by drawing their
information and to find out how
choice of surveyor is also up to scheme
pension benefits.
SSAS Solutions can help you,
members.
A key difference between the two products
contact
Furthermore, there is no mandatory
however is in how they are regulated. Anyone
requirement to obtain expensive specialist
wishing to operate a SIPP, must first apply to
028 9037 6970 or visit
reports such as environmental reports or
the Financial Conduct Authority (FCA) for
www.ssassolutions.com
asbestos reports where property is involved
approval.
T
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