Home > News > 2000 > August 2000 > Setting up a SSAS
Setting up a SSAS
You may think that this would be a complicated process, but this need not be the case. Barnett Waddingham can provide all of the documentation required very quickly, and as long as all the proposed members of the SSAS are available to sign the paperwork, you can be up and running in a couple of days.
Criteria
In order that a SSAS can be established, there needs to be a limited company - partnerships are not allowed to have a SSAS, and perhaps should consider a SIPP (details of these plans are elsewhere on this site). Investment companies are also not able to set up a SSAS. The company needs to be taxed as a trading company, and the proposed members must be receiving earnings (other than dividends) to be eligible.
Who should be included?
A SSAS is designed for share-owning directors and their families (who need to be employed by the company), and it is unusual for employees to be included. This is because all members of the scheme need to be trustees, and agree unanimously to all decisions, and there may be a conflict of interests if employees were included.
When should the SSAS be set up?
A SSAS can be set up at any time, although this is often done close to the financial year end of the company when there is a good idea as to the profitability and the scope for making contributions to a pension plan. We would recommend that you liase with your other professional advisers, particularly your accountant, so that all relevant issues are considered. It should be borne in mind that once a contribution has been paid to a SSAS, it is committed to provide retirement benefits, and cannot be repaid to the company.
Professional Advice
A Barnett Waddingham consultant would be very happy to attend a meeting with no obligation, in conjunction with your advisers, to discuss whether a SSAS would be appropriate for you, and how it could be utilised. Investments in commercial property are very popular, and you may have a proposal in mind - perhaps the property from which your company trades - and this could be discussed at the meeting together with any questions that you may have.
Contributions
An important point to bear in mind is that in order for a contribution to the SSAS to qualify for tax relief, it must be paid in the relevant tax year. Therefore, if your company's year end is 31 December, the contribution must be paid to the SSAS by 31 December 2000 to qualify for tax relief in that year.
In order that a contribution can be paid, a bank account needs to be set up for the SSAS, and so it is important that sufficient time is allowed for this to be done. You can chose any bank, but you may wish to consider opening an account with the Bank of Scotland in Leeds, as they offer our clients an instant access account paying interest on any balance over £1 at 0.25% below base rate. We would be happy to open an account with them for you.
There are limits on the amount that the Inland Revenue will allow the company to contribute, which are based on a member's age, earnings and when employment with the company started. We can calculate the maximum contributions that can be paid.
Documentation
A SSAS is established as a trust fund and is governed by a trust deed. All members of the scheme would be trustees together with a professional trustee required by the Inland Revenue called a Pensioneer Trustee. Barnett Waddingham Trustees Limited would act as the Pensioneer Trustee. SSAS is a totally separate legal entity to your company, and any creditors of the company have no claim on any assets held by the scheme.
Tax Approval
As soon as a the documentation we provide has been completed, and a bank account has been opened and a contribution has been paid into it, the SSAS is set up, and the money can be invested. We will apply to the Inland Revenue for approval of the SSAS, which is normally received within a month of the application being made.
There are probably many more questions that you may have, and please do not hesitate to contact us.
Andrew Hague, August 2000.