Excel Pensions - SSAS Specialists
AND TAX BENEFITS
Normally, contributions to a SSAS are made by the sponsoring employer. Contributions can be regular, or as a one off payment or both.
Where contributions are made to the SSAS from the sponsoring employer, these contributions should be eligible as a tax deductible expense to the business, thus reducing the amount of profit chargeable to tax.
N.B. To be a tax deductible item the contribution must be deemed to be wholly and exclusively for the benefit of the business.
It is also possible for members to make a personal contribution, which again may be eligible for tax relief at their highest marginal rate.
Where a member is not employed by the sponsoring employer, it is possible to either have their employer make contributions to the SSAS or make their own personal contributions.
It is also possible for both companies and individuals to make a contribution using an asset that they already own, such as stocks and shares and commercial property. This is known as an in specie contribution, and again may attract tax relief.
HOW MUCH CAN BE CONTRIBUTED?
Contributions to all Registered Pension Schemes in respect of an individual member are subject to the Annual Allowance as published by HMRC on an annual basis.
HMRC does not impose limits on the level of contributions that a member can make to a registered necessary scheme. However, member contributions in any tax year where tax relief is sought are restricted to the greater of:
£3,600 gross or 100% of relevant UK earnings which are chargeable to Income Tax.
Tax relief on employer contributions made to a registered pension scheme is provided by allowing these contributions to be deducted as an expense in calculating the profits of a trade, profession or investment business and therefore reducing the amount of an employer’s taxable profit.
THREE YEAR CARRY FORWARD
This option allows a member to carry forward any unused annual allowance from the previous three tax years, providing the current years annual allowance has been used up.
The member must also have had a UK registered pension scheme in the year that they want to carry forward from.
In addition to the potential tax benefits set out above, it is worth noting that all funds held in the SSAS are exempt from Inheritance Tax (IHT) from the day they are contributed.
Investments will grow free of both income and capital gains tax. Where a SSAS holds commercial property, any rent received will be paid tax free.
WE CAN HELP
Advise on the amount that can be contributed for each member
Who can make a contribution
Calculate the contribution amount that can be carried forward from previous years
Advise on any in specie transfers and if they are acceptable investments for a SSAS
Calculate the potential tax savings and benefits
Guide you through the whole process