SSAS pensions: our role as a professional trustee

Published by Lisa White on

Estimated reading time: 5 minutes


Barnett Waddingham has been providing guidance to Small Self Administered Scheme (SSAS) trustees since the firm was established in 1989. We acted as a ‘pensioneer trustee’ prior to pension simplification being introduced in 2006 and since that date as a professional trustee. 

I joined Barnett Waddingham in 1998 and started my career in our Cheltenham SSAS team. During my time in Cheltenham I regularly visited the Everyman Theatre. The Everyman is a beautiful building designed by architect Frank Matcham, who is responsible for many of the country’s beloved theatres and buildings.

One of the things Frank Matcham is credited for is designing a cantilever to hold the balconies in his theatres. This provided audiences with essential support whilst removing the need for pillars, which would otherwise obscure their view.

"I see our role as a professional trustee to our SSAS clients similar to that of the role of the cantilevers in Frank Matcham’s theatres – to support the member trustees as they carry out their duties, whilst making pensions legislation as clear and transparent as possible for them."

What are the responsibilities of a professional trustee?

Our main responsibility is to provide guidance to member trustees to ensure their SSAS stays within what is permitted by HM Revenue & Customs (HMRC). This covers all manner of things, including the amounts that may be contributed, how the pension savings are allocated to the members, how the funds are invested and what benefits can be paid. 

Pension legislation can be complex and, at times, something of a ‘blunt instrument’. HMRC may levy tax charges if the trustees get things wrong, even inadvertently. These tax charges can be significant and may be levied on the members of the SSAS personally and the SSAS’s sponsoring employer. 

Where we act as professional trustee we are involved at the outset with various aspects, including contribution decisions, investment decisions and benefit payments. Therefore, we can highlight any potential issues and help the SSAS trustees avoid unnecessary tax penalties. For most SSASs, all trustee decisions must be made unanimously, including the professional trustee, before they are acted upon.

We are not financial advisers and so do not give financial advice. However, we do work alongside financial advisers to help our mutual SSAS clients achieve their goals for their pension savings.

Providing clarity to avoid unnecessary tax charges

We act as co-signatory to the trustees’ bank account, signing all cheques and bank instructions alongside the member trustees. This helps us to ensure that any connected party transactions are carried out on ‘arms-length’ terms, and that the SSAS does not buy anything that could be deemed by HMRC to be ‘taxable property’, which would result in penal tax charges from HMRC. 

However, it is not always obvious what payments might cause issues with HMRC. For example, the trustees of a SSAS may be refurbishing their commercial property for letting purposes and want to install a new heating system. Whilst the trustees could instruct an engineer to install the heating system, and pay for it once it has been fitted and become an integral part of the building, they could not buy a radiator for the heating engineer to fit.

"If the trustees bought the radiator, this would result in the SSAS owning taxable property, thereby incurring a tax charge."

As one of the trustees, we are also registered as a co-owner of the SSAS investments, again to ensure that the SSAS does not buy taxable property or invest in anything that would result in a tax charge from HMRC. 

As I mentioned in my blog, “Holding Residential property in a SSAS or SIPP”, it can sometimes be unclear whether an investment will be tax-efficient for a SSAS, because of the different elements comprising the investment. SSASs cannot invest in residential property without incurring penal tax charges. However, we can assist the member trustees with the things they need to consider when determining whether or not a property would be deemed by HMRC to be residential. 

Other responsibilities of a professional trustee

As professional trustee, we also work alongside the Scheme Administrator to complete the necessary reporting for the SSAS. There are various reporting matters to complete, including a triennial return to the Pensions Regulator (TPR), the regulatory body that oversees SSASs, an annual registered pension scheme return to HMRC and various reports; for example, if the number of SSAS members changes, or if members draw certain benefits.

As you may expect, fines are levied for non-compliance and we help ensure the reports are submitted within the permitted timescales.

Supporting our SSAS clients

In the current climate, our supporting role – and making pensions legislation as clear and as transparent as possible – is particularly important. For example, many of our SSASs hold commercial property and, given the impact that Covid-19 is having on the economy at present, we are receiving requests from tenants to defer rental payments. This can cause a conflict with HMRC rules for SSASs, particularly if the tenant is a connected party. 

SSAS trustees may also be considering lending to the SSAS’s sponsoring employer, if the company needs short-term funding to assist it through what may be a difficult trading time.

"Loans to sponsoring employers are permitted, but will only be tax-efficient if they meet certain criteria. We are currently guiding SSAS member trustees through these sorts of issues and the matters that need to be addressed."

I work in our Leeds SSAS team now and my commute to the office includes (or did include before lockdown) a stroll through the County Arcade in Leeds City Centre, another of Frank Matcham’s beautiful creations. I am always amazed with the splendour of this building and I hope the services that we offer to our SSAS clients as professional trustee are equally as impressive. 

If you would like to talk about this topic or have any questions in general, please get in touch with your usual Barnett Waddingham contact to find out how we can support you. Alternatively, please contact me below.

Visit our self-invested pensions Covid-19 hub for the latest expert analysis on the coronavirus impact on business, investment, insurance and pensions.

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