If you're looking for ways to make improvements your personal balance sheet it's important to consider all of the options available. Have you considered the potential benefits of SSAS Property Pension?
A fantastic privilege of a SSAS property pension is that it can purchase, own and develop land and/or commercial property. This brings extensive tax advantages, including:
As a pension, the SSAS can only purchase commercial property. This can be freehold or leasehold property. Examples of the type of property classed by HMRC as commercial include offices, industrial units, warehouses and business units, shops, garages and car parks, agricultural land, land marked for development, forests, nursing homes, hotel buildings, pubs etc.
It is within HMRC regulations if the development is non-residential or has not reached the point of being habitable. To put that simply, you could buy land, apply for residential planning and develop the land. Prior to any building becoming habitable, simply sell the development, avoiding owning the development with any residential element on site and bank the gains in your pension tax free.
Use your SSAS to inject cash into your business by purchasing your business premises and leasing them back to your company. (Under HMRC rules, a SSAS can purchase commercial property, including property that you own, up to the value of 50% of the fund).
As you can see, when you combine tax relief on contributions, tax free growth in the pension fund, the rental payments being tax deductible and received by the pension without liability to tax, the power of the SSAS to make you money and protect your assets is a very powerful one.
The direct purchase of residential property may not be permitted within any pension but with a SSAS property pension there are options such as property bonds, crowdfunding, property investments by an unconnected 3rd party with a SSAS loan etc., all of which could allow your SSAS to generate returns from residential property.
This means you can transfer an asset, owned by yourself, the business or a member of the SSAS, into the ownership of the SSAS. For example, commercial property, quoted stock and shares, intellectual property, insured funds etc., can be transferred to the fund. This avoids sale costs and the cost of reinvestment under the SSAS. An asset held in a SSAS property pension is protected from creditors in the event of your business becoming insolvent.
All directors can pool former private or employer pensions
Unlike personal pension schemes, a property SSAS pension can combine the funds of up to 12 directors, senior executives or family members. With just one pooled pension, you are only subject to one set of fees; yet another massive benefit of the SSAS. It also significantly enhances buying power. Moreover, a SSAS property pension can borrow 50% of the combined value of all director pensions as a mortgage further enhancing your buying and investing position.
This is just a brief explanation of how the unique flexibility of a SSAS can help you make money.
Always seek expert advice, The Landlord’s Pension are experienced in pensions and property investment. Transferring your existing and frozen workplace pensions to a SSAS could be your ideal avenue for making your money work harder this year.
The content of this post is up to date and relevant as at 06/04/2020.
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